Iraq: 2025 Article IV Consultation-Press Release; Staff Report; and Informational Annex

International Monetary Fund

No 2025/183, IMF Staff Country Reports from International Monetary Fund

Abstract: The 2025 Article IV Consultation discusses that Iraq has managed to uphold domestic stability despite regional turmoil and global uncertainty. At the same time, the non-oil economy slowed down in 2024 following a very strong growth in 2023. Inflation has remained subdued amid weaker demand. Financing constraints and lower oil revenues are expected to constrain fiscal spending, taking an additional toll on economic activity. Against a baseline of low oil prices, fiscal deficits and external accounts are projected to deteriorate further over the medium term unless significant reforms are undertaken to increase non-oil revenues, control the public wage bill, and boost non-oil growth potential through an ambitious structural reform agenda. Implementing the proposed reforms could generate fiscal space for increased non-oil capital spending. Efforts to strengthen the domestic financial system should continue and accelerate. Promoting private sector growth and economic diversification is essential for long-term stability and sustainable job creation. A comprehensive structural reform agenda encompassing governance and anti-corruption reforms, credit markets, labor market and business regulations could double non-oil growth potential.

Keywords: financing constraint; Customs law-implementing regulation; CBI governance; oil GDP; potential GDP; Oil prices; Producer price indexes; Global (search for similar items in EconPapers)
Pages: 64
Date: 2025-07-14
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