Home Middle East EconomyIraq Economy Iraq Economic Forecast

Iraq Economic Forecast

By: EconomyWatch Content Team Date: 16 June 2010

About The Author

The Economy Watch Content Team manages our thousands of reference pages on economic, industry,

For many years, Iraq was plagued by an unstable economy, primarily due to insurgent attacks and poor security. However, several areas of this country have seen improvement in the past few years, which has helped to boost the economy. The primary sector of Iraq is oil and gas, which for a long time has been responsible for providing more than 90% of the country’s revenue for foreign currency exchange. In addition, high oil and gas prices have increased the total government earnings. Unfortunately, in 2008 Iraq saw a slight decline because of the global financial crisis but today, it is making good strides in building institutions that will support new economic policies being created. Under the Stand-by-Arrangement or SBA with the International Monetary Fund (IMF) that was implemented in 2009, an 80% reduction of public debt to creditors in Paris Club countries would be dramatically reduced. Other improvements underway include the establishment of a contemporary legal system, programs to gain more foreign involvement with joint ventures, and inflation costs being controlled through the national Central Bank through appreciate of Iraq’s currency against the US dollar.

Iraq GDP Forecast

Throughout history, the main sector for Iraq has been oil, a key contributor to the foreign exchange. Sadly, the financial crisis coupled with a long, eight-year war virtually devastated the majority of the country’s oil reserves, leading to significant international loans and new restrictions being developed. Currently, Iraq still has a long way to go in paying off debt and recovering from damage caused by the war but some leeway is occurring. In looking at the Iraq GDP (Gross Domestic Product, Current Prices, US Dollar), we see the year closed out at $86.53 billion (US currency), which followed by a 23.91% reduction to close 2009 at $65.838 billion. At the end of 2009, the new numbers for GDP put the country at number 62 for world rankings. Using a specific formula and data, forecasters believe that 2010 will end up at $80.29 billion in US dollars due to an increase of 21.94% and that by 2015, a significant change will close at $143.173 billion in US money.

Iraq Unemployment Forecast

Forecasters also look at the Iraq population and Iraq unemployment rate when predicting future numbers for the economy. The population for this country is estimated at close to 29 million people and of those, only 8.175 people work. Because of this, more than 25% of the population lives below the poverty line with the Iraq unemployment rate sitting at more than 15%!

Iraq Inflation Rate Forecast

To determine the Iraq inflation rate, experts use values that are based on the GDP in national currency, along with projections for the exchange rate. Of course, data used is only for the current year, rather than being from end-of-period. In 2009, inflation for this country was at a negative 2.801%, putting the country’s world ranking at number 179. This number was a staggering decline of 204.99% from 2008, which closed at 2.67%. For 2010, experts believe another huge reduction of 282.36% will occur, pushing numbers to a 5.11%. However for 2015, the change is not quite as drastic, closing this year at 4%.

Iraq Current Account Balance Forecast

Finally, for the Iraq current account balance, experts use all transactions (excluding capital and financial items) with primary classifications of goods, services, current transfers, and income. In this category, 2009 was a negative $12.763 billion in US dollars, which meant for world rankings, Iraq was at number 170. Looking to the future, forecasters expect an increase of 32.01% in 2010, which would close the year at a negative $16.85 billion but then for 2015, a significant change is expected to $2.929 billion, again in US dollars.