According to Trading Economics global macro models and analysts, Iraq’s GDP is anticipated to reach 220.00 USD billion by the end of 2021. According to our econometric models, Iraq’s GDP will trend at 245.00 USD billion in 2022.
What accounts for Iraq’s poor GDP?
Iraq’s economy is dominated by the oil sector, which has supplied 99.7% of all foreign exchange revenues in the country’s modern history. By 2021, the oil sector will account for almost 92 percent of all foreign exchange revenues. Following the 14 July Revolution, which ousted the Hashemite Iraqi monarchy, Iraq’s previously rural economy grew rapidly. By 1980, it had risen to become the Middle East’s third-largest economy. The Iraqi government’s successful industrialization and infrastructure development activities in the 1970s, which included irrigation projects, railway and highway construction, and rural electricity, contributed to this.
The Ba’athist administration implemented austerity measures, borrowed significantly, and eventually rescheduled international debt payments in the 1980s due to financial troubles caused by enormous expenditures in the Iran-Iraq War and damage to Iran’s oil export facilities. The conflict cost Iraq at least $80 billion in economic losses. The hostilities concluded in 1988. Oil exports progressively increased as new pipelines were built and destroyed facilities were repaired, but they fell precipitously after the Persian Gulf War. GDP fell to one-fourth of what it was in 1980, and continued to fall as a result of postwar international sanctions until it received funding from the United Nations Oil-for-Food Programme in 1997.
Following the 2003 US-led invasion, the Coalition Provisional Authority attempted to modernize Iraq’s economy by privatizing and lowering the country’s foreign debt. However, due to a conflict, economic mismanagement, and oil shortages caused by antiquated technologies, Iraq’s economy has continued to deteriorate. Oil export earnings have been returning to pre-Operation New Dawn levels since mid-2009. Along with global oil prices, government income have recovered. As a result of new contracts with multinational oil corporations, Baghdad’s oil exports are likely to rise above their present level of 1,900,000 bbl (300,000 m3) per day in 2011. It was expected to fall short of its budgeted production of 2,400,000 barrels (380,000 m3) per day. Iraq’s recent contracts with large oil corporations have the potential to significantly increase oil earnings, but these deals will need Iraq to modernize its oil processing, pipeline, and export facilities.
Improved security and an early wave of foreign investment are boosting economic activity, especially in the energy, construction, and retail sectors. Broader economic growth, long-term fiscal health, and sustained advances in the standard of living are still contingent on the government passing important legislative reforms and the continuous development of Iraq’s vast oil reserves. Despite the fact that international investors showed rising interest in Iraq in 2010, most are still impeded by issues obtaining land for projects and other regulatory obstacles.
What’s the state of Iraq’s economy?
Following a pandemic-related downturn last year, the economy is gradually recovering, thanks in part to increased non-oil activity. Improved global oil market conditions are likely to boost growth in the medium term, bringing fiscal and external balances into surplus by 2021 and reversing the current debt spike.
Latest Developments:
After the double oil and COVID-19 shocks of 2020, the economy is gradually recovering. GDP increased by 0.9 percent year over year (y/y) in the first half of 2021 (H1-21). The non-oil economy grew by over 21% year on year in H1-21 (y/y), thanks to strong service sector performance (COVID-19 containment measures were eased, aided by a pick-up in the vaccination campaign and the decline in COVID infection positivity rate). As Iraq adjusted to its OPEC+ quota early in the year, this recovery exceeded the decline in the oil sector, which fell by 10% in H1-21.
Outlook:
The resurgence in global oil markets has boosted Iraq’s economic prospects, but the proliferation of novel COVID-19 types and climate change challenges remain serious hurdles. Rising oil prices and OPEC+ output limitations, which are set to expire in 2022, are expected to help the economy gradually recover. In the medium run, oil GDP will be the primary driver of growth. Due to the impact of the new COVID-19 Delta version, as well as water and electricity shortages that affect agriculture and businesses, non-oil GDP is expected to improve but remain below 3% on average in 2021-23. The fiscal balance is expected to remain in surplus in the medium term under this scenario, resulting in a steady improvement in the debt-to-GDP ratio.
What is the significance of Iraq?
More information about Iraq can be found on the Iraq Page, as well as in Department of State publications and other sources indicated at the bottom of this fact sheet.
The United States Mission in Iraq is committed to a long-term strategic engagement with the Iraqi government and people. The US aided Iraq’s efforts to reach the December 2017 milestone of freeing the country from ISIS in conjunction with the Global Coalition to Defeat ISIS. Following ISIS’ territorial defeat in Iraq, the US stepped up efforts to stabilize freed territories as Iraq progressed toward being an independent, stable, and self-sufficient country. Iraq has emerged as a major regional partner for the US as well as a voice of moderation and democracy in the Middle East. Iraq has well-functioning government structures, including a functioning legislature, and is playing a more positive role in the area. In accordance with the US-Iraq Strategic Framework Agreement, the US continues an active and wide engagement with Iraq on diplomatic, political, economic, and security concerns (SFA).
The SFA between Iraq and the United States is the cornerstone of the bilateral relationship between the two countries. It emphasizes the important relationship and common goals that the two countries share by covering a wide range of bilateral issues, including political relations and diplomacy, defense and security, trade and finance, energy, judicial and law enforcement issues, services, science, culture, education, and the environment. The Higher Coordinating Committee and many Joint Coordination Committees are in charge of implementing the SFA.
The United States’ bilateral assistance to Iraq is focused on economic reform, vulnerable group support, and democracy and governance. We are continuing to assist Iraq’s civil society organizations and elected officials in building their capability. In a changing Middle East region, US bilateral assistance aspires not just to strengthen Iraq’s democratic institutions, but also to maintain the strategic, political, and economic value of the US-Iraq cooperation. Since 2014, the US has provided billions of dollars in humanitarian, demining, and stabilization aid to conflict-affected and displaced Iraqis in the region, including support for genocide survivors.
The building of a modern, accountable, economically viable, and professional Iraqi military capable of defending Iraq and its borders is supported by US security aid. While enhancing the Iraqi military’s capability to respond to threats and undertake counter-terrorism operations, US security aid programs also foster civilian control of the military, adherence to the rule of law, and respect for human rights. To further these goals and to assist Iraq’s position as a responsible security partner contributing to the region’s peace and security, the Embassy of Baghdad maintains the Office of Security Cooperation Iraq.
The Iraqi government has expressed its goal to move away from a centrally planned economy and toward a market-based economy. The United States is one of Iraq’s most important trading partners, and US investment has expanded dramatically in the recent decade. Iraq has been recognized as a beneficiary developing nation under the Generalized System of Preferences program in order to enhance trade, and various American firms are involved in Iraq, particularly in the energy, defense, information technology, automotive, and transportation sectors. In 2019, two-way goods trade was $8.2 billion, with $1.2 billion in US exports to Iraq and $7.0 billion in Iraqi exports to the US, virtually entirely made up of crude oil. Exports of agricultural products from the United States fell from $374 million in 2018 to $231 million in 2019. The United States and Iraq signed a Trade and Investment Framework Deal in 2013, and the agreement formed a US-Iraq Trade and Investment Council, which met in 2014 and 2019. The Iraqi government signed MOUs totaling $8 billion in prospective transactions with US corporations on the sidelines of the bilateral Strategic Dialogue in August 2020.
The United Nations, the International Monetary Fund, the World Bank, and the Arab League are among the international organizations with which Iraq collaborates. Iraq has also applied to join the World Trade Organization (WTO) (WTO).
Iraq has an embassy in the United States, which is located at 3421 Massachusetts Avenue, NW, Washington, DC 20007, and can be reached at 202-742-1600.
The Department of State and other sources provide information on Iraq, some of which are included below:
What are the main imports from Iraq?
Machinery and transport equipment (38 percent of total imports), manufactured articles (27 percent), mineral fuels (10 percent), and chemicals and related products (ten percent) are Iraq’s key imports (7 percent). Syria (18 percent of total imports), China (14 percent), and the United States are the main import partners (6 percent).
What is Iraq’s reputation?
The Culture of Iraq (Arabic: ) or Mesopotamia Culture is one of the world’s oldest cultural histories and is often regarded as one of the most significant cultures. Mesopotamia, the region between the Tigris and Euphrates rivers, is commonly referred to as the Cradle of Civilization. Mesopotamia’s legacy influenced and shaped Old World civilizations in a variety of ways, including the invention of writing, mathematics, and law. Iraq is home to a wide range of ethnic groups and has a long and illustrious history. Poets, architects, painters, and sculptors from the country are among the greatest in the region, with some of them being world-class. Iraq is known for creating high-quality handicrafts, such as rugs and carpets, among other items.
Iraq also honors and celebrates its achievements in pre-Islamic times as well as during the Islamic Golden Age, when Baghdad served as the capital of the Abbasid Caliphate.
What is Iraq’s main source of revenue?
Overview According to the Economic Complexity Index, Iraq was the world’s number 53 economy in terms of GDP (current US$), number 44 in total exports, number 51 in total imports, number 115 in terms of GDP per capita (current US$), and the number 90 most complicated economy in 2020. (ECI).
Exports Crude Petroleum ($45.2 billion), Gold ($7.98 billion), Refined Petroleum ($4.25 billion), Petroleum Coke ($424 million), and Coal Tar Oil ($102 million) are Iraq’s top exports, with most of it going to China ($17 billion), India ($14.4 billion), Turkey ($8.19 billion), South Korea ($3.78 billion), and the United States ($2.85 billion).
Imports Broadcasting Equipment ($3.33 billion), Refined Petroleum ($2.6 billion), Cars ($1.86 billion), Jewellery ($1.44 billion), and Packaged Medicaments ($996 million) are Iraq’s top imports, with the majority coming from the United Arab Emirates ($13.1 billion), China ($10.9 billion), Turkey ($9.14 billion), India ($1.46 billion), and Germany ($1.04 billion).
Location By land, Iraq shares borders with Iran, Jordan, Kuwait, Saudi Arabia, Syria, and Turkey.
Is Iraq a petroleum-rich country?
There is a lot of it. At the time, data from the US Energy Information Administration (EIA) showed that “Iraq has the world’s second-largest proved oil reserves, with over 112 billion barrels. Iraq also has 110 trillion cubic feet of natural gas and is a regional and worldwide security hotspot.”