Iraq: Selected Issues

International Monetary Fund

No 2025/184, IMF Staff Country Reports from International Monetary Fund

Abstract: This Selected Issues paper explores the role of structural reforms in boosting medium term non-oil growth. Iraq’s non-oil economic growth has been slow, constrained by low productivity, limited investment and an inefficient use of human capital. Against the background of an excessive dependency on oil, an outsized public sector footprint, a fragile political context, and lingering institutional and governance shortfalls, non-oil medium term growth is expected to remain subdued, at 3–4 percent – mostly driven by demographics. In order to unlock its potential for sustained growth and prepare the country for growing social challenges in the next decade, Iraq should commit to and implement an ambitious structural reform agenda. Estimates suggest that a comprehensive reform package aimed at improving governance, intensifying the fight against corruption, streamlining labor market and business regulations, and strengthening the banking sector could improve growth by an additional 4 percent over the medium-term.

Keywords: medium term NON-OIL growth; oil productivity growth; E. structural reform; Iraq's Medium-term growth; labor productivity growth; Labor markets; Total factor productivity; Employment; Productivity; Middle East and Central Asia; Global (search for similar items in EconPapers)
Pages: 19
Date: 2025-07-14
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