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Economic situation Need for deep reforms
The COVID-19 pandemic and falling oil prices caused a slump in Iraq’s economy of 11.3 per cent in 2020. In 2021, the economy recovered and gross domestic product (GDP) rose by 2.8 per cent according to the World Bank. In 2022, it grew even more strongly thanks to a sharp rise in oil prices.
However, since the global economy is increasingly turning its back on oil, as part of a global transformation of energy systems, it is likely that the country’s revenues will tend to decrease in the future. In order to reduce the dependence on the oil sector, deep structural reforms and economic diversification are needed.
More jobs required
A better climate for doing business is also necessary, in order to create job opportunities for the mostly young Iraqis entering the labour market for the first time. Almost 40 per cent of Iraqis are younger than 15. In 2021, according to the World Bank, the unemployment rate was 14.2 per cent. Among young people 37 per cent were not in education, training or employment.
So far not enough is being done to boost the private sector. Almost 40 per cent of all Iraqis are employed in the public sector. In 2022, according to the World Bank, more than 30 per cent of the national budget was channelled into this sector, considerably limiting the government's scope for action.
As at: 20/03/2023