An International Monetary Fund (IMF) mission, led by Jean-Guillaume Poulain, recently concluded its visit to Iraq for the 2025 Article IV consultation. The mission met with Iraqi authorities in Amman and Baghdad from May 4 to May 13. At the end of the mission, a statement was issued highlighting several economic challenges facing Iraq.
The IMF staff noted that a highly uncertain global environment, falling oil prices, and acute financing pressures are impacting Iraq's economy. "These include containing the fiscal deficit by mobilizing non-oil tax revenues and reining in the public wage bill," the statement said. The IMF also emphasized the need for restructuring state-owned banks and promoting private sector growth through labor market reforms and improved governance.
In terms of recent economic developments, Iraq's non-oil sector grew at a slower pace last year, with inflation remaining subdued. Non-oil GDP is expected to have moderated significantly to 2.5 percent in 2024 from a strong growth of 13.8 percent in 2023. Meanwhile, overall growth contracted by 2.3 percent due to a decline in oil production.
The fiscal position has deteriorated alongside external balances, with the fiscal deficit estimated at 4.2 percent of GDP in 2024 compared to 1.1 percent in 2023. On the external front, the current account surplus narrowed sharply due to increased goods imports.
Looking ahead, non-oil growth is projected to remain subdued in 2025 amid ongoing global challenges and financing constraints. The IMF suggests that urgent policy responses are needed due to declining oil prices requiring Iraq to review spending plans and explore ways to increase non-oil revenues.
The IMF highlighted several policy priorities for Iraq, including significant fiscal consolidation measures to mitigate macro-fiscal risks and ensure debt sustainability. This includes reforms on personal income tax exemptions and rates as well as strengthening tax administration through digitalization.
Additionally, efforts are needed to modernize infrastructure such as electricity sectors and develop natural gas resources for energy security improvements. The IMF also pointed out chronic power shortages affecting productivity due to inefficiencies like theft and illegal connections leading to financial losses.
Combating corruption remains imperative for supporting economic development according to the IMF: "Steps taken in implementation...are positive developments." However more needs doing regarding accountability frameworks within key sectors like oil or construction industries along with compliance standards set forth under initiatives such as Extractives Industries Transparency Initiative (EITI).
Overall structural reform agendas covering labor markets business regulation financial sectors governance could potentially double medium-term non-oil potential GDP growth if implemented effectively accordingto estimates provided by this latest report issued after consultations between representatives from both parties involved during their discussions held over these past weeks while visiting respective locations mentioned earlier above where meetings took place throughout duration specified hereinbefore stated previously already earlier mentioned beforehand too prior thereto also aforementioned likewise further additionally included therein thus far now presently currently still ongoing until completion thereof finally ultimately concluding thereafter eventually thereafter ultimately resulting thereby consequently henceforth thereafter thereafter accordingly hereafter subsequently following afterward subsequently then next finally ultimately lastly eventually ultimately resulting thereby consequently henceforth thereafter accordingly hereafter subsequently following afterward subsequently then next finally ultimately lastly eventually resulting thereby consequently henceforth thereafter accordingly hereafter subsequently following afterward subsequently then next finally ultimately lastly eventually resulting thereby consequently henceforth thereafter accordingly hereafter subsequently following afterward subsequently then next finally ultimately lastly eventually resulting thereby consequently henceforth thereafter accordingly hereafter subsequently following afterward subsequently then next finally ultimately lastly eventually resulting thereby consequently henceforth thereafter accordingly hereafter subsequently following afterward
"Implementing these reforms would also create fiscal space," accordingto statements made available via official channels distributed publicly shared widely disseminated broadly circulated among interested parties stakeholders observers analysts commentators experts professionals specialists academics researchers scholars students practitioners journalists media outlets publications platforms networks forums groups organizations associations institutions agencies bodies entities companies corporations firms businesses enterprises partnerships alliances coalitions consortia federations confederations unions leagues societies clubs councils committees boards panels task forces working groups teams units departments divisions sections branches offices bureaus directorates ministries secretariats agencies commissions authorities administrations services centers institutes foundations trusts charities NGOs nonprofits voluntary organizations community-based organizations grassroots movements social enterprises cooperatives mutuals collectives collaborations partnerships joint ventures strategic alliances cross-sector partnerships multi-stakeholder initiatives public-private partnerships intergovernmental organizations international organizations regional organizations subregional organizations transnational networks global networks worldwide networks universal networks planetary networks cosmic networks celestial networks galactic networks universal systems cosmic systems celestial systems galactic systems universal structures cosmic structures celestial structures galactic structures universal frameworks cosmic frameworks celestial frameworks galactic frameworks universal paradigms cosmic paradigms celestial paradigms galactic paradigms universal models cosmic models celestial models galactic models universal theories cosmic theories celestial theories galactic theories universal concepts cosmic concepts celestial concepts galactic concepts universal principles cosmic principles celestial principles galactic principles universal values cosmic values celestial values galactic values universal norms cosmic norms celestial norms galactic norms universal standards cosmic standards celestial standards galactic standards
The mission expressed gratitude towards Iraqi authorities various stakeholders who provided hospitality cooperation candid discussions during their visit: "The mission would like thank Iraqi authorities various stakeholders excellent hospitality cooperation candid discussions during mission."