International Monetary Fund: Sharp contraction to hit Iraq’s economy in 2026
International Monetary Fund: Sharp contraction to hit Iraq’s economy in 2026
2026-04-18
Shafaq News – Baghdad
The International Monetary Fund’s Regional Economic Outlook report revealed expectations that the Iraqi economy will contract significantly during 2026, due to the repercussions of the war and disruptions to trade and production in the region.
According to the report, issued in April and reviewed by Shafaq News Agency, Iraq’s GDP is expected to contract by 6.8% in 2026, compared to a slight contraction of 0.4% in 2025, placing it among the worst-performing economies in the Middle East and North Africa region.
The report noted that these projections represent a sharp downward revision, as Iraq’s 2026 growth estimates were reduced by about 10.4 percentage points compared to the October 2025 projections, reflecting the magnitude of the negative impacts resulting from geopolitical tensions and disruptions to supply chains.
In contrast, the report predicted that the Iraqi economy would experience a strong recovery in 2027, with growth of 11.3%, driven by a return to economic activity, before growth stabilizes at more moderate levels of around 3.4% in 2030 and 3.5% in 2031.
This decline comes at a time when Iraq is facing complex challenges, including trade disruptions, the impact on the oil sector, and pressures on public finances, putting the economy in a difficult phase that requires balanced policies to support stability and recovery.
shafaq.com
