IMF projects Iraq’s GDP to expand by 1.4% in 2024, 5.3% in 2025

Baghdad (IraqiNews.com) – The International Monetary Fund (IMF) expected last week that Iraq’s GDP will grow by 1.4 percent in 2024 and 5.3 percent in 2025.

The IMF predicted that Iraq’s budget deficit would rise to 7.6 percent in 2024 compared to 1.3 percent in 2023, noting that a significant fiscal adjustment is needed to stabilize debt over the medium term.

While the country was mainly undisturbed by the ongoing violence in the region, this helped to enable the strong return of Iraq’s non-oil economy following a recession in 2022.

Domestic inflation dropped to four percent by the end of 2023, indicating reduced international food costs, the currency revaluation as of February 2023, and the stabilization in trade finance. Yet, because of the significant budgetary increase and the decline in oil prices, imbalances have gotten worse.

While Iraq’s sensitivity to changes in oil prices and the continued worsening of its fiscal and external accounts will result from the continuous fiscal expansion, growth is anticipated to increase in 2024, according to the IMF report.

The public debt-to-GDP percentage in Iraq is predicted to be 48.2 percent in 2024 and 54.6 percent in 2025, according to the report.