Iraq Economy - 2021


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Economic overview

Iraq's GDP growth slowed to 1.1% in 2017, a marked decline compared to the previous two years as domestic consumption and investment fell because of civil violence and a sluggish oil market. The Iraqi Government received its third tranche of funding from its 2016 Stand-By Arrangement (SBA) with the IMF in August 2017, which is intended to stabilize its finances by encouraging improved fiscal management, needed economic reform, and expenditure reduction. Additionally, in late 2017 Iraq received more than $1.4 billion in financing from international lenders, part of which was generated by issuing a $1 billion bond for reconstruction and rehabilitation in areas liberated from ISIL. Investment and key sector diversification are crucial components to Iraq’s long-term economic development and require a strengthened business climate with enhanced legal and regulatory oversight to bolster private-sector engagement. The overall standard of living depends on global oil prices, the central government passage of major policy reforms, a stable security environment post-ISIS, and the resolution of civil discord with the Kurdish Regional Government (KRG).

Iraq's largely state-run economy is dominated by the oil sector, which provides roughly 85% of government revenue and 80% of foreign exchange earnings, and is a major determinant of the economy's fortunes. Iraq's contracts with major oil companies have the potential to further expand oil exports and revenues, but Iraq will need to make significant upgrades to its oil processing, pipeline, and export infrastructure to enable these deals to reach their economic potential.

In 2017, Iraqi oil exports from northern fields were disrupted following a KRG referendum that resulted in the Iraqi Government reasserting federal control over disputed oil fields and energy infrastructure in Kirkuk. The Iraqi government and the KRG dispute the role of federal and regional authorities in the development and export of natural resources. In 2007, the KRG passed an oil law to develop IKR oil and gas reserves independent of the federal government. The KRG has signed about 50 contracts with foreign energy companies to develop its reserves, some of which lie in territories taken by Baghdad in October 2017. The KRG is able to unilaterally export oil from the fields it retains control of through its own pipeline to Turkey, which Baghdad claims is illegal. In the absence of a national hydrocarbons law, the two sides have entered into five provisional oil- and revenue-sharing deals since 2009, all of which collapsed.

Iraq is making slow progress enacting laws and developing the institutions needed to implement economic policy, and political reforms are still needed to assuage investors' concerns regarding the uncertain business climate. The Government of Iraq is eager to attract additional foreign direct investment, but it faces a number of obstacles, including a tenuous political system and concerns about security and societal stability. Rampant corruption, outdated infrastructure, insufficient essential services, skilled labor shortages, and antiquated commercial laws stifle investment and continue to constrain growth of private, nonoil sectors. Under the Iraqi constitution, some competencies relevant to the overall investment climate are either shared by the federal government and the regions or are devolved entirely to local governments. Investment in the IKR operates within the framework of the Kurdistan Region Investment Law (Law 4 of 2006) and the Kurdistan Board of Investment, which is designed to provide incentives to help economic development in areas under the authority of the KRG.

Inflation has remained under control since 2006. However, Iraqi leaders remain hard-pressed to translate macroeconomic gains into an improved standard of living for the Iraqi populace. Unemployment remains a problem throughout the country despite a bloated public sector. Overregulation has made it difficult for Iraqi citizens and foreign investors to start new businesses. Corruption and lack of economic reforms - such as restructuring banks and developing the private sector – have inhibited the growth of the private sector.

Real GDP growth rate

-2.1% (2017 est.)

13.1% (2016 est.)

2.5% (2015 est.)

Inflation rate (consumer prices)

-0.1% (2019 est.)

0.3% (2018 est.)

0.2% (2017 est.)

Credit ratings

Fitch rating: B- (2015)

Moody's rating: Caa1 (2017)

Standard & Poors rating: B- (2015)

Real GDP (purchasing power parity)

$427.736 billion (2019 est.)

$409.705 billion (2018 est.)

$412.027 billion (2017 est.)

note: data are in 2010 dollars

GDP (official exchange rate)

$231.994 billion (2019 est.)

Real GDP per capita

$10,881 (2019 est.)

$10,660 (2018 est.)

$10,972 (2017 est.)

note: data are in 2010 dollars

Gross national saving

13.3% of GDP (2019 est.)

20.6% of GDP (2018 est.)

18.9% of GDP (2017 est.)

GDP - composition, by sector of origin

agriculture: 3.3% (2017 est.)

industry: 51% (2017 est.)

services: 45.8% (2017 est.)

GDP - composition, by end use

household consumption: 50.4% (2013 est.)

government consumption: 22.9% (2016 est.)

investment in fixed capital: 20.6% (2016 est.)

investment in inventories: 0% (2016 est.)

exports of goods and services: 32.5% (2016 est.)

imports of goods and services: -40.9% (2016 est.)

Ease of Doing Business Index scores

Overall score: 44.7 (2020)

Starting a Business score: 77.3 (2020)

Trading score: 25.3 (2020)

Enforcement score: 48 (2020)

Agricultural products

wheat, barley, dates, tomatoes, rice, maize, grapes, potatoes, rice, watermelons


petroleum, chemicals, textiles, leather, construction materials, food processing, fertilizer, metal fabrication/processing

Industrial production growth rate

0.7% (2017 est.)

Labor force

8.9 million (2010 est.)

Labor force - by occupation

agriculture: 21.6%

industry: 18.7%

services: 59.8% (2008 est.)

Unemployment rate

16% (2012 est.)

15% (2010 est.)

Population below poverty line

23% (2014 est.)

Gini Index coefficient - distribution of family income

29.5 (2012 est.)

Household income or consumption by percentage share

lowest 10%: 3.6%

highest 10%: 25.7% (2007 est.)


revenues: 68.71 billion (2017 est.)

expenditures: 76.82 billion (2017 est.)

Taxes and other revenues

35.7% (of GDP) (2017 est.)

Budget surplus (+) or deficit (-)

-4.2% (of GDP) (2017 est.)

Public debt

59.7% of GDP (2017 est.)

66% of GDP (2016 est.)

Fiscal year

calendar year

Current account balance

$4.344 billion (2017 est.)

-$13.38 billion (2016 est.)


$61.4 billion (2017 est.)

$41.72 billion (2016 est.)

Exports - partners

China 26%, India 24%, South Korea 9%, United States 8%, Italy 6%, Greece 6% (2019)

Exports - commodities

crude petroleum, refined petroleum, gold, dates, petroleum coke (2019)


$39.47 billion (2017 est.)

$19.57 billion (2016 est.)

Imports - partners

United Arab Emirates 28%, Turkey 21%, China 19% (2019)

Imports - commodities

refined petroleum, broadcasting equipment, cars, jewelry, cigarettes (2019)

Reserves of foreign exchange and gold

$48.88 billion (31 December 2017 est.)

$45.36 billion (31 December 2016 est.)

Debt - external

$73.02 billion (31 December 2017 est.)

$64.16 billion (31 December 2016 est.)

Exchange rates

Iraqi dinars (IQD) per US dollar -

1,184 (2017 est.)

1,182 (2016 est.)

1,182 (2015 est.)

1,167.63 (2014 est.)

1,213.72 (2013 est.)

NOTE: The information regarding Iraq on this page is re-published from the 2021 World Fact Book of the United States Central Intelligence Agency and other sources. No claims are made regarding the accuracy of Iraq 2021 information contained here. All suggestions for corrections of any errors about Iraq 2021 should be addressed to the CIA or the source cited on each page.

This page was last modified 16 Dec 23, Copyright © 2023 ITA all rights reserved.