The IMF predicts Iraq’s economy will contract by 16% in 2026 and experience strong growth in 2027.
The IMF predicts Iraq’s economy will contract by 16% in 2026 and experience strong growth in 2027.
2026-10-13
Shafaq News – Baghdad
The International Monetary Fund (IMF) predicted that Iraq’s real GDP would contract by 16% in 2026, before growing by 19% in 2027, according to data from the World Economic Outlook report issued in October 2026, at a time when estimates indicate rising inflation and a worsening current account deficit during the current year.
According to the table on the economies of the Middle East and Central Asia in the report, which was reviewed by Shafaq News Agency, the Iraqi economy contracted by 0.4% in 2025, while the Fund expected the inflation rate to reach 3.5% in 2026, compared to 0.3% in 2025, before declining to 3% in 2027.
On the current account side, the IMF projected that Iraq would record a deficit equivalent to 10.8% of GDP in 2026, compared to a deficit of 3.8% in 2025, before turning into a surplus equivalent to 2.2% of GDP in 2027.
These estimates place Iraq among the oil-exporting economies in the region that the IMF expects to experience a contraction during 2026, as the table indicated that the economies of oil-exporting countries combined will contract by 3.8%, before achieving growth of 7.4% in 2027.
In contrast, the report predicted that Saudi Arabia’s real GDP would contract by 3.3%, the UAE’s by 3.9%, Qatar’s by 15.6%, and Kuwait’s by 16.7% during 2026, with these economies expected to register growth in 2027.
Iraq’s figures reflect a sharp contrast between the 2026 and 2027 projections, with the economy moving from a major contraction to high growth, according to the IMF’s estimates. This does not necessarily mean that living standards or household financial conditions will improve at the same pace, as these indicators remain linked to other factors, including job opportunities, income, inflation, and public finance performance.
Iraq’s real GDP is the total value of goods and services produced by the Iraqi economy during a year.
shafaq.com
