## IMF Executive Board Concludes 2025 Article IV Consultation with Iraq _IMF News, July 9, 2025_ ## Source details **Canonical URL:** [IMF Executive Board Concludes 2025 Article IV Consultation with Iraq](https://www.imf.org/en/news/articles/2025/07/08/pr-25243-iraq-imf-executive-board-concludes-2025-article-iv-consultation) ## Other formats - [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) ## Bibliographic details - Published: July 9, 2025 --- ### Executive Board assessment and macroeconomic outlook - 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: - 2024 (Est.): -2.3 - 2025 (Proj.): 3.1 - 2026 (Proj.): 1.4 - Non-oil real GDP growth: - 2024 (Est.): 2.5 - 2025 (Proj.): 1.0 - 2026 (Proj.): 1.5 - Inflation, end of period (%): - 2024 (Est.): 2.7 - 2025 (Proj.): 2.9 - Current account (% of GDP): - 2024 (Est.): 2.0 - 2025 (Proj.): 0.2 - 2026 (Proj.): -1.9 - Major near-term risks: financing constraints, subdued investment, constrained growth potential, accumulation of arrears, and intensified preexisting fragilities. ### Fiscal situation and recommendations - 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: - Revenues and grants (% of GDP): 2024: 39.3; 2025: 36.9; 2026: 34.6 - Oil revenue (% of GDP): 2024: 36.0; 2025: 33.3; 2026: 31.0 - Expenditure and net lending (% of GDP): 2024: 43.5; 2025: 44.4; 2026: 43.8 - Wages and pensions (% of GDP): 2024: 22.0; 2025: 24.0; 2026: 24.5 - Fiscal balance (% of GDP): 2024: -4.2; 2025: -7.5; 2026: -9.2 - Non-oil primary balance (% of non-oil GDP): 2024: -59.3; 2025: -54.2; 2026: -51.8 - 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) - Policy recommendations: - Immediate: review 2025 current and capital spending plans and limit or postpone all non-essential expenditure. - Medium term: undertake a sizable fiscal adjustment to mitigate macro-fiscal risks, contain liquidity risks, and stabilize debt. - Required consolidation: stabilizing debt would require an additional fiscal consolidation of 1–1.5 percent of non-oil GDP per year. - Revenue-side options: - Strengthen tax administration. - Increase customs duties and excise taxes. - Reform personal income tax including by limiting exemptions. - Introduce a general sales tax in the medium term. - Spending-side options: - Comprehensive public wage bill reforms through limiting mandatory hiring and adopting an attrition rule. - Further improve targeting of the public distribution system and eventually shift to cash-based social safety nets. - Reform the public pension system by raising the retirement age and reducing both the accrual and replacement rates. - Protect crucial non-oil capital expenditures to expand investment in trade and transportation infrastructure, modernize the electricity sector, and develop natural gas resources. ### Monetary policy, liquidity, and financial sector recommendations - Monetary and liquidity indicators: - Broad money (% change): 2024: -4.3; 2025: 9.6; 2026: 4.9 - Credit to the private sector (% change): 2024: 14.3; 2025: 5.4; 2026: 8.4 - Gross reserves (US$ billions): 2024: 100.3; 2025: 91.0; 2026: 79.2 - Gross reserves in months of imports: 11.1 (2024) - Total external debt (% of GDP): 2024: 20.6; 2025: 20.8; 2026: 21.0 - Exchange rate (dinar per US$; period average): 1300 (2024) - Recommendations to absorb excess liquidity and improve monetary transmission: - Increase issuance of CB-bills, focusing on short-term instruments piloted by the policy rate. - Adjust bid size limits and refine liquidity forecasting tools. - Financial sector reform priorities: - Continue and accelerate efforts to strengthen the domestic financial system. - Comprehensive restructuring plan for state-owned banks to address nonperforming loans and capital shortfalls, improve corporate governance and digital infrastructure. - 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. - Address weaknesses in anti-money laundering and counter-terrorism financing. ### Structural reforms to boost non-oil growth and governance - 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: - Enhance labor force participation, especially among women, by improving education and removing legal barriers. - Reform public sector hiring to boost productivity. - Improve vocational training to align skills with market needs. - Simplify regulations and reduce bureaucratic obstacles to encourage formal economy participation and private sector development. - 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. - Improve procurement, public financial management, and address corruption to boost effectiveness of public investments. - Governance and anti-corruption measures: - Strengthen accountability in state-owned and private enterprises. - Comply strictly with EITI standards. - Enact a Law on Transparency and Access to Information. - Align legal frameworks with international best practices. - Enhance the independence of NAZAHA. ### Data gaps and surveillance - 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. ### Selected economic indicators and country facts - 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: - Crude oil production (millions of barrels/day): 2024: 3.9; 2025: 4.1 - Crude oil exports (millions of barrels/day): 2024: 3.4; 2025: 3.5 - Average crude oil export price (US$/barrel): 2024: 80.6; 2025: 65.9; 2026: 62.0 - Crude oil exports (US$ billions): 2024: 99.2; 2025: 84.2 *Source: IMF Press Release No. 25/243 — IMF Executive Board Concludes 2025 Article IV Consultation with Iraq* --- ## References - [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) _Source: https://www.imf.org/en/news/articles/2025/07/08/pr-25243-iraq-imf-executive-board-concludes-2025-article-iv-consultation_