Iraq’s Economy Growth of 1.4% Signals Modest Recovery

Iraq’s economy grew by 1.4% in the past Iranian year, indicating a modest recovery. This growth follows a contraction of 2.9% in 2023, largely attributed to rising oil production. Regional growth rates varied, with Iran at 3.7%, while non-oil sectors in Iraq also saw contributions. Despite improvement, challenges like unemployment persist.

Iraq achieved an economic growth rate of 1.4% in the past Iranian year, as per economic indicators released by Iran’s Central Bank. The results reflect the initial nine months of the Iranian year, which concluded recently. In comparison, Iran’s economy grew by 3.7%, a rate deemed stable relative to both regional and global figures.

Further analysis reveals that fixed capital formation in Iran increased by 3.4%, while non-oil trade rose significantly to over $116 billion, reflecting an 11.2% increase. Other regional economies reported growth as well, with Turkiye expanding by 2.8%, Pakistan by 2.5%, and both Iraq and Saudi Arabia at a rate of 1.4%. The combined growth for the Middle East and Central Asia stood at 2.4%.

Iraq’s growth can be viewed as a modest recovery from a 2.9% contraction in the year 2023, as identified by the International Monetary Fund (IMF). This improvement is primarily due to a gradual increase in oil production and exports, which has been buoyed by stable global oil prices.

Moreover, the World Bank noted that Iraq’s growth is bolstered by advancements in non-oil sectors such as agriculture, construction, and services. However, there remains a consensus that the current growth rate is insufficient to significantly reduce unemployment or improve living standards. Both the IMF and World Bank emphasize that Iraq must achieve more robust and sustained growth to confront structural challenges and secure long-term economic stability.

In conclusion, Iraq’s reported economic growth of 1.4% marks a fragile recovery following a contraction last year. While rising oil production and growth in non-oil sectors contribute positively, experts warn that this growth is insufficient to tackle pressing issues such as unemployment and inadequate living standards. Sustainable economic development remains critical for Iraq’s future stability.

Original Source: shafaq.com