{ "title": "IMF Executive Board Concludes 2025 Article IV Consultation with Iraq", "publication": "IMF News, July 9, 2025", "sourceUrl": "https://www.imf.org/en/news/articles/2025/07/08/pr-25243-iraq-imf-executive-board-concludes-2025-article-iv-consultation", "canonical": "https://www.imf.org/en/news/articles/2025/07/08/pr-25243-iraq-imf-executive-board-concludes-2025-article-iv-consultation", "overlayPath": "/en/news/articles/2025/07/08/pr-25243-iraq-imf-executive-board-concludes-2025-article-iv-consultation/index.md", "summary": "The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Iraq and considered and endorsed the staff appraisal without a meeting on a lapse-of-time basis .", "publishDate": "2025-07-09", "sections": [ { "heading": "Executive Board assessment and macroeconomic outlook", "content": "- The Executive Board concluded the Article IV consultation and endorsed the staff appraisal without a meeting on a lapse-of-time basis.\n- Iraq upheld domestic stability despite regional turmoil and global uncertainty.\n- The non-oil economy slowed from 13.8 percent in 2023 to an estimated 2.5 percent in 2024.\n- Real GDP growth:\n - 2024 (Est.): -2.3\n - 2025 (Proj.): 3.1\n - 2026 (Proj.): 1.4\n- Non-oil real GDP growth:\n - 2024 (Est.): 2.5\n - 2025 (Proj.): 1.0\n - 2026 (Proj.): 1.5\n- Inflation, end of period (%):\n - 2024 (Est.): 2.7\n - 2025 (Proj.): 2.9\n- Current account (% of GDP):\n - 2024 (Est.): 2.0\n - 2025 (Proj.): 0.2\n - 2026 (Proj.): -1.9\n- Major near-term risks: financing constraints, subdued investment, constrained growth potential, accumulation of arrears, and intensified preexisting fragilities." }, { "heading": "Fiscal situation and recommendations", "content": "- Fiscal vulnerabilities have risen due to a large fiscal expansion and a decline in oil prices.\n- The oil price required to balance the budget increased to around $84 in 2024, up from $54 in 2020.\n- Fiscal projections and indicators:\n - Revenues and grants (% of GDP): 2024: 39.3; 2025: 36.9; 2026: 34.6\n - Oil revenue (% of GDP): 2024: 36.0; 2025: 33.3; 2026: 31.0\n - Expenditure and net lending (% of GDP): 2024: 43.5; 2025: 44.4; 2026: 43.8\n - Wages and pensions (% of GDP): 2024: 22.0; 2025: 24.0; 2026: 24.5\n - Fiscal balance (% of GDP): 2024: -4.2; 2025: -7.5; 2026: -9.2\n - Non-oil primary balance (% of non-oil GDP): 2024: -59.3; 2025: -54.2; 2026: -51.8\n - Total government debt (% of GDP): 2024: 47.2; 2025: 62.3; 2026: (Proj.) 62.3 listed for 2025 and 2026 row shows increase to 62.3 in 2025 (table presents 2026 as 62.3 for 2025 then absent for 2026 — use table values)\n- Policy recommendations:\n - Immediate: review 2025 current and capital spending plans and limit or postpone all non-essential expenditure.\n - Medium term: undertake a sizable fiscal adjustment to mitigate macro-fiscal risks, contain liquidity risks, and stabilize debt.\n - Required consolidation: stabilizing debt would require an additional fiscal consolidation of 1–1.5 percent of non-oil GDP per year.\n - Revenue-side options:\n - Strengthen tax administration.\n - Increase customs duties and excise taxes.\n - Reform personal income tax including by limiting exemptions.\n - Introduce a general sales tax in the medium term.\n - Spending-side options:\n - Comprehensive public wage bill reforms through limiting mandatory hiring and adopting an attrition rule.\n - Further improve targeting of the public distribution system and eventually shift to cash-based social safety nets.\n - Reform the public pension system by raising the retirement age and reducing both the accrual and replacement rates.\n - Protect crucial non-oil capital expenditures to expand investment in trade and transportation infrastructure, modernize the electricity sector, and develop natural gas resources." }, { "heading": "Monetary policy, liquidity, and financial sector recommendations", "content": "- Monetary and liquidity indicators:\n - Broad money (% change): 2024: -4.3; 2025: 9.6; 2026: 4.9\n - Credit to the private sector (% change): 2024: 14.3; 2025: 5.4; 2026: 8.4\n - Gross reserves (US$ billions): 2024: 100.3; 2025: 91.0; 2026: 79.2\n - Gross reserves in months of imports: 11.1 (2024)\n - Total external debt (% of GDP): 2024: 20.6; 2025: 20.8; 2026: 21.0\n - Exchange rate (dinar per US$; period average): 1300 (2024)\n- Recommendations to absorb excess liquidity and improve monetary transmission:\n - Increase issuance of CB-bills, focusing on short-term instruments piloted by the policy rate.\n - Adjust bid size limits and refine liquidity forecasting tools.\n- Financial sector reform priorities:\n - Continue and accelerate efforts to strengthen the domestic financial system.\n - Comprehensive restructuring plan for state-owned banks to address nonperforming loans and capital shortfalls, improve corporate governance and digital infrastructure.\n - Explore reforms to strengthen the private banking sector: ownership structure, business model sustainability, regulatory requirements, and support measures such as a credit bureau and stronger deposit guarantee scheme.\n - Address weaknesses in anti-money laundering and counter-terrorism financing." }, { "heading": "Structural reforms to boost non-oil growth and governance", "content": "- Potential gains: estimates suggest reforms in the labor market, business regulation, financial sector, and governance could double non-oil potential GDP growth in the medium term.\n- Key structural priorities:\n - Enhance labor force participation, especially among women, by improving education and removing legal barriers.\n - Reform public sector hiring to boost productivity.\n - Improve vocational training to align skills with market needs.\n - Simplify regulations and reduce bureaucratic obstacles to encourage formal economy participation and private sector development.\n - Accelerate electricity sector reform: improve billing and collection; once collection improves, achieve cost recovery via electricity tariff increases with carefully calibrated subsidies targeted to low-income users.\n - Improve procurement, public financial management, and address corruption to boost effectiveness of public investments.\n- Governance and anti-corruption measures:\n - Strengthen accountability in state-owned and private enterprises.\n - Comply strictly with EITI standards.\n - Enact a Law on Transparency and Access to Information.\n - Align legal frameworks with international best practices.\n - Enhance the independence of NAZAHA." }, { "heading": "Data gaps and surveillance", "content": "- Major data deficiencies persist and can significantly undermine the robustness of IMF surveillance.\n- Recommendation: build on the numerous CD Iraq has received and focus on the most pressing data gaps, incorporating pilot initiatives into disseminated data in a timely manner." }, { "heading": "Selected economic indicators and country facts", "content": "- Population: 44.4 million (2024 est.)\n- Per capita GDP: US$ 6,183 (2024)\n- Quota: SDR 1,663.8 million\n- Poverty rate: 23 percent (2014)\n- Main products and exports: Crude oil\n- Key export markets: United States, India, China, South Korea\n- Oil and gas sector:\n - Crude oil production (millions of barrels/day): 2024: 3.9; 2025: 4.1\n - Crude oil exports (millions of barrels/day): 2024: 3.4; 2025: 3.5\n - Average crude oil export price (US$/barrel): 2024: 80.6; 2025: 65.9; 2026: 62.0\n - Crude oil exports (US$ billions): 2024: 99.2; 2025: 84.2\n\nSource: IMF Press Release No. 25/243 — IMF Executive Board Concludes 2025 Article IV Consultation with Iraq\n\n---\n\n\n References\n\n- Iraq and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2025/07/08/pr-25243-iraq-imf-executive-board-concludes-2025-article-iv-consultation" } ], "bullets": [ "[Markdown version](/en/news/articles/2025/07/08/pr-25243-iraq-imf-executive-board-concludes-2025-article-iv-consultation/index.md)", "[Structured JSON version](/en/news/articles/2025/07/08/pr-25243-iraq-imf-executive-board-concludes-2025-article-iv-consultation/index.json)", "[Bundle manifest](/en/news/articles/2025/07/08/pr-25243-iraq-imf-executive-board-concludes-2025-article-iv-consultation/bundle-manifest.json)", "Published: July 9, 2025", "The Executive Board concluded the Article IV consultation and endorsed the staff appraisal without a meeting on a lapse-of-time basis.", "Iraq upheld domestic stability despite regional turmoil and global uncertainty.", "The non-oil economy slowed from 13.8 percent in 2023 to an estimated 2.5 percent in 2024.", "Real GDP growth:", "Non-oil real GDP growth:", "Inflation, end of period (%):", "Current account (% of GDP):", "Major near-term risks: financing constraints, subdued investment, constrained growth potential, accumulation of arrears, and intensified preexisting fragilities.", "Fiscal vulnerabilities have risen due to a large fiscal expansion and a decline in oil prices.", "The oil price required to balance the budget increased to around $84 in 2024, up from $54 in 2020.", "Fiscal projections and indicators:", "Policy recommendations:", "Monetary and liquidity indicators:", "Recommendations to absorb excess liquidity and improve monetary transmission:", "Financial sector reform priorities:", "Potential gains: estimates suggest reforms in the labor market, business regulation, financial sector, and governance could double non-oil potential GDP growth in the medium term.", "Key structural priorities:", "Governance and anti-corruption measures:", "Major data deficiencies persist and can significantly undermine the robustness of IMF surveillance.", "Recommendation: build on the numerous CD Iraq has received and focus on the most pressing data gaps, incorporating pilot initiatives into disseminated data in a timely manner.", "Population: 44.4 million (2024 est.)", "Per capita GDP: US$ 6,183 (2024)", "Quota: SDR 1,663.8 million", "Poverty rate: 23 percent (2014)", "Main products and exports: Crude oil", "Key export markets: United States, India, China, South Korea", "Oil and gas sector:", "[Iraq and the IMF](http://www.imf.org/external/country/IRQ/index.htm)", "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)", "[Press Releases](https://www.imf.org/en/news/searchnews)", "[PRESS CENTER](http://presscenter.imf.org/)", "[https://www.imf.org/en/home](https://www.imf.org/en/home)" ], "alternates": { "markdown": "/en/news/articles/2025/07/08/pr-25243-iraq-imf-executive-board-concludes-2025-article-iv-consultation/index.md", "json": "/en/news/articles/2025/07/08/pr-25243-iraq-imf-executive-board-concludes-2025-article-iv-consultation/index.json", "bundleManifest": "/en/news/articles/2025/07/08/pr-25243-iraq-imf-executive-board-concludes-2025-article-iv-consultation/bundle-manifest.json" }, "generatedAtUtc": "2026-09-26T04:02:20.611Z" }