## Unlocking Iraq's Economic Potential: The Role of Structural Reforms in Boosting Medium Term Non-Oil Growth

_Selected Issues Papers, June 10, 2025_

## Source details

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## Bibliographic details
- Authors: Filippo Gori, Hela Mrabet
- Published: June 10, 2025
- Series: Selected Issues Papers
- DOI: https://doi.org/10.5089/9798229021685.018

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### Major findings
- Iraq’s non-oil economic growth has been slow, constrained by low productivity, limited investment and an inefficient use of human capital.
- The economy faces an excessive dependency on oil, an outsized public sector footprint, a fragile political context, and lingering institutional and governance shortfalls.
- Non-oil medium term growth is expected to remain subdued, at 3-4 percent – mostly driven by demographics.
- Estimates suggest that a comprehensive reform package could improve growth by an additional 4 percent over the medium-term.

### Projections and scenarios
- Baseline medium-term non-oil growth projection: 3-4 percent (mostly driven by demographics).
- Reform scenario: Comprehensive structural reforms raise medium-term growth by an additional 4 percent relative to the baseline.

### Policy recommendations (core elements of the proposed reform package)
- Improve governance.
- Intensify the fight against corruption.
- Streamline labor market and business regulations.
- Strengthen the banking sector.
- Commit to and implement an ambitious structural reform agenda to unlock sustained non-oil growth and prepare the country for growing social challenges in the next decade.

### Subject areas and keywords (as stated)
- Employment, Labor, Labor markets, Macrostructural analysis, Production, Structural reforms, Total factor productivity
- Employment; Governance; IMF staff calculation; Investment; Labor Market; labor productivity growth; Labor regulation; medium term NON-OIL growth; Middle East and Central Asia; oil growth; Potential Growth; Productivity; Structural Reforms; Total factor productivity

*Source: Unlocking Iraq's Economic Potential: The Role of Structural Reforms in Boosting Medium Term Non-Oil Growth (Selected Issues Papers, 2025).*

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_Source: https://www.imf.org/en/publications/selected-issues-papers/issues/2025/08/19/unlocking-iraq-s-economic-potential-the-role-of-structural-reforms-in-boosting-medium-term-569767_