Economic situation in Iraq (2022)

Report on the economic situation in Iraq (2022)

Iraq's economy depends heavily on the oil sector, as the oil sector is considered the main sector in the Iraqi economy, which makes macroeconomic forecasts exposed to a high degree of risk due to the high dependence on oil. After a contraction in Iraq's economy as a result of the COVID-19 pandemic in 2020, growth is expected to continue, with growth of 2.8% in 2021. GDP increased in the second half of 2021 due to higher oil revenues, leading to fiscal surpluses. It is possible for the government to exploit these revenues to achieve economic diversification and development in other sectors instead of relying on only one sector.

Iraq is considered among the 10 fastest growing economies in the world, with a GDP growth rate of 9.3%, the second place globally in 2022, due to rising oil prices. The country's cash reserves are expected to increase to more than $90 billion at the end of 2022.

Regarding inflation rates, Iraq's annual inflation rate rose to 5.4% in August 2022, the highest inflation rate recorded by the country. The food inflation rate reached 6.87% in July 2022. Iraq faces many challenges in the field of food security as a result of the continuous fluctuation in food commodity prices and increasing demand due to population increase and climate changes. Resolving this crisis requires sustained internal efforts, and international aid and subsidies can provide support in the short time, but the government must seek to attract more investments to achieve self-sufficiency and diversify the economy.

The following table shows the most important economic indicators: