Knowledge Note

"Faced with this multifaceted crisis, Iraq’s growth is expected to contract by 9.5 percent in 2020, the worst annual performance since 2003."

Iraq’s economy is expected to contract in 2020 due to lower oil prices and the spread of COVID-19. The twin deficits are mounting as a result, reversing the declining trend on public debt and adding pressure on the exchange rate and central bank reserves. Weaker oil prices, budget rigidities as well as cuts to pro-growth program, and the slow implementation of structural reforms are all upstream risks to the economic outlook that will hinder advancing human capital formation and job creation.