IMF Report on Iraq's Economic Status 2025 Unlocking Iraq's Economic Potential

This is a Summary of the IMF's report on "Unlocking Iraq’s Economic Potential."  Download the entire report here. 

Iraq’s economy has a big problem: it depends way too much on oil. While the country has a lot of people ready to work, especially young people, there aren’t enough good jobs, and the economy outside of oil is not growing much. Since 2018, Iraq’s economy has barely grown, and most of that came from oil. The other parts of the economy, like businesses and services, have stayed weak. Many young people can’t find jobs, and a large number don’t work or go to school. For women, the situation is even worse, with most not participating in the workforce at all.

One big reason for this slow progress is that Iraq's private businesses are very small, and the government tries to fix the job shortage by hiring more people in public jobs. But this just makes the government spend too much and doesn’t really help the economy grow. Most of the country's productivity—the amount of useful work people can do—has stayed the same for years. Only manufacturing has improved a bit, but it’s still a tiny part of Iraq’s economy.

Iraq also has deep problems with corruption, outdated rules for businesses, and a banking system that mainly helps the government, not private companies or regular people. Because of this, starting and growing a business in Iraq is hard. Getting loans is also tough unless you’re connected to the public sector.

The International Monetary Fund (IMF) says that if Iraq wants to grow, it needs to make big changes. These include fighting corruption, fixing the rules so businesses can grow, improving how banks work, and making the job market fairer and more flexible. If Iraq makes these changes, it could grow its economy by 4.5% more each year over the next five years. This would help create more jobs, especially for young people, and give the country a better future that’s not just tied to oil.