Iraq’s GDP growth rate in 2016.
Steven Wyble is online content editor at Scotsman Guide Media.
Reach him at (800) 297-6061 or firstname.lastname@example.org.
Despite its reputation as one of the world’s most unstable countries, Iraq is poised
for economic growth. If the war-torn country can successfully weather the storms of
armed conflicts and unpredictable oil prices, it could prove an attractive option for
Iraq’s largely state-run economy is heavily oil-dependent, with more than 90 percent
of government revenue and 80 percent of foreign-exchange earnings coming from oil,
according to the CIA World Factbook.
Although oil prices fell in recent years, hamstringing Iraq’s economy, rising oil prices
in 2016 gave the country’s economy a much-needed boost. In 2016, the country’s oil
exports averaged 3. 3 million barrels per day, up from 2015, and the country’s GDP
grew by more than 10 percent last year.
An additional boon to Iraq’s economy came in 2015, when the country received a three-year, $5.34 billion loan from the International Monetary Fund (IMF). The loan, which was
provided in direct response to the economic challenges posed by lower oil prices and
armed conflicts, includes funding for measures to protect the more than 4 million Iraqis
who have been displaced by the ongoing conflicts in the country, according to the IMF.
Despite these gains, the country faces several obstacles to economic growth, including
a political system the CIA calls “tenuous,” as well as ongoing concerns about security
and societal stability. Iraqi security forces made “impressive” gains against the Iraqi
insurgency in 2016, according to the CIA, but the country’s infrastructure has already
sustained heavy damage.
The Iraqi government’s conflicts with the militant Islamic State group (aka ISIS) have
ravaged the country’s infrastructure. Battles with the group have damaged roads,
buildings, civilian houses and oil refineries, according to a report from Rudaw, a
Kurdish media network. Iraq’s deputy minister of oil, Ziya Jaafar, says the oil sector has
lost more than $15 billion as a result of conflicts with the Islamic State.
Although the country’s war-torn landscape may not seem like an ideal investment
location, the country’s need to rebuild poses opportunities for investors who are in
it for the long haul.
Despite the country’s economic volatility, Iraq has “long term potential for U.S. investment,” according to a 2015 report from the U.S. Department of State. The report points
out that the country has the fifth-largest proven oil reserves in the world and is in need
of significant reconstruction and infrastructure development.
The CIA notes that Iraq will need to make “significant upgrades” to its oil-processing,
pipeline and export infrastructure to take advantage of contracts with major oil
companies that could bolster the country’s economy. n
By Steven Wyble
Iraq’s inflation rate as of
Iraq’s unemployment rate in 2016.