Iraq - Market OverviewIraq - Market Overview
- Economic growth slowed from 10% in 2012 to 4% in 2013, slowed further in 2014, in part due to lower global oil prices and unexpected expenditures related to the fight against the Islamic State of Iraq and the Levant (ISIL).Economic growth is expected to continue to be hampered by the Government of Iraq’s fiscal constraints and projected low oil prices into 2016.
- The GOI faces a large fiscal gap in 2015, despite steady increases in Iraqi oil export volumes.Large off-budget expenditures and shortfalls in projected revenue generation are key factors driving the GOI’s fiscal deficit beyond the $21 billion (about one-fifth of total planned expenditures) deficit projected in the 2015 budget.Iraq’s financing gap may widen further as it struggles to secure funds from the international financial market and international financial institutions.
- The World Bank’s 2015 Ease of Doing Business survey ranked Iraq 156 of 189 economies evaluated, down from 146 in 2014.Red tape, a weak banking sector, complex customs procedures, and poor investor protection were identified as major hurdles to doing business in Iraq.
- Under the 2013-2017 National Development Plan adopted by the Council of Ministers in May 2013, Iraq planned to mobilize approximately $400 billion in investment over five years. Priority sectors included oil and gas, electricity, agriculture, transportation, telecom, education, health care, construction, and the industrial sector. Nevertheless, the Iraqi Government’s fiscal constraints as well as preference for funding investment entirely from the current budget may constrain investment in public infrastructure.Non-energy sector growth will be also dependent on the reconstruction and development of infrastructure throughout the country and improving electricity generation capacity, which currently stands at around two-thirds of estimated demand.
- Iraq was the United States’ 56th largest export market in 2014. In 2014 total two-way U.S.-Iraqi trade reached $16 billion. Total U.S. exports to Iraq in 2014 were approximately $2.1 billion, while total Iraqi exports to U.S. reached $13.8 billion.
- The Kurdistan Regional Government (KRG)’s investment and trade regime is considered significantly more favorable to the conduct of business than that managed under the laws of the Government of Iraq, but major challenges exist.
Iraq Trade Development and Promotion