The IMF projects Iraq’s 2025 economic growth at 4.1%, placing it fourth among Arab oil producers. This marks a strong rebound from just 0.1% growth in 2024.
The IMF’s latest economic outlook shows Iraq outperforming several regional peers in terms of projected growth. Libya tops the list with a forecasted expansion of 13.7%, followed by the United Arab Emirates at 5.1%, and Saudi Arabia at 4.6%. Iraq follows closely, ahead of Algeria, which is projected to post a 4% growth rate.
Kuwait, Bahrain, and Oman follow with more moderate forecasts. Economists project Kuwait to grow by 3.3%, Bahrain by 3.2%, and Oman by 3.1%. Qatar rounds out the list with an expected growth rate of 1.9%.
The Iraq economic growth forecast reflects optimism about the country’s ability to stabilize after a challenging year. Falling oil prices and budget constraints limited growth in 2024. However, the IMF expects that improved oil production levels, fiscal adjustments, and ongoing reform efforts will drive stronger performance in 2025.
Several factors support Iraq’s position, economists believe. These include higher expected oil revenues, recovery in the non-oil sector, and greater public investment in infrastructure. The government has also begun efforts to diversify the economy and boost private sector activity, which could contribute to long-term stability.
Still, Iraq faces significant risks. Fluctuations in oil prices, regional tensions, and domestic fiscal pressures could affect performance. The IMF has urged Iraq to continue structural reforms, especially in areas like tax collection, banking modernization, and reducing dependence on oil.
Iraq’s economic growth forecast serves as a key indicator of confidence in the country’s direction. Policymakers and investors alike will watch closely to see whether projected growth translates into job creation and improved living standards.
Overall, Iraq’s outlook in 2025 marks a positive shift and highlights its role in the region’s post-pandemic recovery story.