Expert identifies reasons for Iraq’s economic growth forecast to exceed 5% in 2026
Expert identifies reasons for Iraq’s economic growth forecast to exceed 5% in 2026
2024/07/01
The economic expert, Qusay Safwan, identified the reasons for expectations of economic growth in Iraq reaching more than 5% in 2026.
Safwan told {Euphrates News} that: “The International Monetary Fund’s expectations went towards the external view of the Iraqi economy in light of the success of the government of Mohammed Shia al-Sudani in reducing external debts from $20 million to $9 million, which gives reassurance to the status of the Iraqi economy for the coming years, considering that the interest on those debts will be low.”
He added, “There are also projects that the government of al-Sudani has started at the level of stopping gas flaring and investing associated gas in supplying electricity, meaning reducing outward cash flows to reduce the import of electricity and gas, as well as completing the Faw port in mid-2025 and entering the operational testing phase until it is linked to the European Union.”
Safwan continued, “This means adding non-oil revenues, and these indicators indicate a positive outlook that could contribute to reclassifying Iraq’s credit rating from C3 Plus to B Minus,” noting that “the possibility of Iraq’s GDP rising to 5% in the event of adding initiatives by the Central Bank to pay small and medium-sized projects, which is currently at a rate of $270 billion annually.”
He added, “Iraq is currently a partner with the International Finance Corporation, which is trying to rebuild Iraqi airports, and there are two billion dollars that will be pumped into developing and expanding Baghdad International Airport, which indicates that there is confidence in Iraq’s ability to operate these amounts and return them to lenders.”
Safwan stressed that “the process of developing the energy sector in terms of gas and oil through licensing rounds will contribute to increasing Iraq’s future revenues, as it is looking forward to 6 million barrels for export purposes, meaning that there is a possibility of increasing the ability to spend oil revenues on investment projects,” noting “the importance of transforming understandings into a studied reality in the field of foreign investment.”
The World Bank expected Iraq to achieve economic growth of more than 5% in 2026, noting that the recovery in the oil sector in 2025 will contribute significantly to enhancing this growth.
In its report, the bank stated that Iraq’s economic growth for the year 2022 reached 7.6%, and in 2023 it decreased to -2.9.
The report also expected that Iraq’s economic growth would decline to -0.3% in 2024, achieve growth of 3.8% in 2025, and reach 5.3% in 2026.
The report indicated that oil-exporting countries outside the Gulf Cooperation Council, such as Iraq and Algeria, would benefit from the expected recovery in the oil sector in 2025, which would help boost economic growth in these countries.
alforatnews.iq
