Baghdad: The International Monetary Fund (IMF) warned of a dangerous financial path that threatens economic stability in Iraq, given its overreliance on oil revenues and the rapid expansion of current expenditures, most notably salaries and pensions, amid a near-total stagnation in the non-oil sectors. This places the country at a critical economic and political crossroads.
Baghdad: The International Monetary Fund (IMF) warned of a dangerous financial path that threatens economic stability in Iraq, given its overreliance on oil revenues and the rapid expansion of current expenditures, most notably salaries and pensions, amid a near-total stagnation in the non-oil sectors. This places the country at a critical economic and political crossroads.

According to National Iraqi News Agency, the IMF indicated in a detailed report that Iraq’s non-oil sector growth rate declined sharply from 13.8% in 2023 to an estimated 2.5% in 2024, indicating a gradual contraction in real economic activity outside of oil.

The report also highlighted that the fiscal deficit is expected to reach 7.5% of GDP in 2025, before jumping to 9.2% in 2026. This is driven by declining revenues and rising expenditures, particularly on salaries and pensions, which drain most of the budget’s resources, in the absence of any corresponding production.