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Iraq’s Economy

Screen Shot 2015-03-22 at 10.55.08 PMTaking a look at the economy of Iraq two things are at the forefront: oil and war. Currently their issues lie in the dropping cost of oil and military expenses battling terrorist group ISIS. Iraq’s parliament recently passed a budget of 119 trillion Iraqi dinars which is equal to be about 105 billion dollars. Their current budget was based on expectations that have not come to fruition so far with a price of $56/ barrel with exports of 3.3million barrels/day. However, this past January they only exported 2.4 million barrels/day and averaged sales at about $41/barrel.

In order to help the slow intake the government plans to to take a few measures. The first is to sell bonds which would be expected. They also plan to postpone payments and borrow from their savings which may hurt in the long run. They will also borrow from the IMF and the World Bank. However, they are in a much better place now than they were about 10 years ago when their public debt was over 300% of GDP while it is closer to 31% today.

With the constant political instability where do you think Iraq’s economy will go from here?



  1. oliver2 oliver2

    With almost 90% of Iraqi government revenue coming from oil, low oil prices cannot be doing them any favors in their time of conflict. It is good to see that Kuwait’s allowed a deferment on compensation payments over the Gulf War and that there are plenty of places willing to lend to Iraq.

  2. Stephen Moore Stephen Moore

    SImilar to Russia, Iraq appears to be struggling with an un-diversified economy. Low oil prices hurts their exports, and it is a difficult position to be in when 90% off your government revenue comes from a good dramatically declining in value.

  3. maguirem15 maguirem15

    Both Stephen and Oliver are correct, the political instability directly effect the un-diversified economy. With the low oil prices the government cannot pump money into other sectors of the economy to grow/expand them. One option is to wait and see if oil prices will continue to rise, and then try to diversify their economy when they have more tax revenue coming into the government.

  4. grieve grieve

    It is interesting to look at single-faceted economies, as Iraq’s has been. Russia’s largest oil company, Lukoil, recently announced a vote of confidence for their operation in southern Iraq, stating they plan to expand oil production and feel confident about the future. This is certainly good news for Iraq and their economy.

  5. winn winn

    War and political instability certainly do not bode well for the country’s economy. As the country has relatively weak institutions and high political turnover, policies the country implements will be perceived as weak (no matter how well-intentioned) and deter economic activity. This will be a major hurdle in the country’s path to stable economic production.

  6. Is it really credible that GDP per capita is 30% higher today than at any time in the past???

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