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Iraq Economy
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General

Iraq's economy is dominated by the oil sector, which has traditionally provided about 95% of foreign exchange earnings. In the 1980s financial problems caused by massive expenditures in the eight-year war with Iran and damage to oil export facilities by Iran led the government to implement austerity measures, borrow heavily, and later reschedule foreign debt payments. Iraq suffered economic losses from the war of at least US$100 billion. After hostilities ended in 1988, oil exports gradually increased with the construction of new pipelines and restoration of damaged facilities. A combination of low oil prices, repayment of war debts (estimated at around US$3 billion a year) and the costs of reconstruction resulted in a serious financial crisis which was the main short term motivation for the invasion of Kuwait.

On November 20, 2004, the Paris Club of creditor nations agreed to write off 80% (US$33 billion) of Iraq's US$42 billion debt to Club members. Iraq's total external debt was around US$120 billion at the time of the 2003 invasion, and had grown by US$5 billion by 2004. The debt relief will be implemented in three stages: two of 30% each and one of 20%.

At the end of 2005, and in the first half of 2006, Iraq implemented a restructuring of about US$20 billion of commercial debt claims on terms comparable to that of its November 2004 Paris Club agreement (i.e. with an 80% writeoff). Iraq offered to its larger claimants a US dollar denominated bond maturing in 2028. Smaller commercial claimants received a cash settlement of comparable value.

Overview

Economy - overview
Iraq's economy is dominated by the oil sector, which has traditionally provided about 95% of foreign exchange earnings. Although looting, insurgent attacks and sabotage have undermined economy rebuilding efforts, economic activity is beginning to pick up in areas recently secured by the US military surge. Oil exports are around levels seen before Operation Iraqi Freedom, and total government revenues have benefited from high oil prices. Iraq has received pledges for $13.5 billion in foreign aid for 2004-07 from outside of the US, more than $33 billion in total pledges. The International Compact with Iraq was established in May 2007 to integrate Iraq into the regional and global economy, and the Iraqi government is seeking to pass laws to strengthen its economy. This legislation includes a hydrocarbon law to establish a modern legal framework to allow Iraq to develop its resources and a revenue sharing law to equitably divide oil revenues within the nation, although both are still bogged down in discussions. The Central Bank has been successful in controlling inflation through appreciation of the dinar against the US dollar. Reducing corruption and implementing structural reforms, such as bank restructuring and developing the private sector, will be key to Iraq's economic success.

GDP (purchasing power parity)
$102.3 billion (2007 est.)

GDP (official exchange rate)
$55.44 billion (2007 est.)

GDP - real growth rate
5% (2007 est.)

GDP - per capita (PPP)
$3,600 (2007 est.)

GDP - composition by sector
agriculture: 5%
industry: 68%
services: 27% (2006 est.)

Labour force
7.4 million (2004 est.)

Labour force - by occupation
agriculture: NA%
industry: NA%
services: NA%

Unemployment rate
18% to 30% (2006 est.)

Population below poverty line
NA%

Household income or consumption by percentage share
lowest 10%: NA%
highest 10%: NA%

Inflation rate (consumer prices)
4.7% (2007 est.)

Budget
revenues: $42.3 billion
expenditures: $48.4 billion (FY08 est.)

Agriculture - products
wheat, barley, rice, vegetables, dates, cotton; cattle, sheep, poultry

Industries
petroleum, chemicals, textiles, leather, construction materials, food processing, fertiliser, metal fabrication/processing

Industrial production growth rate
7.9% (2007 est.)

Electricity - production
33.53 billion kWh (2007 est.)

Electricity - consumption
35.84 billion kWh (2007 est.)

Electricity - exports
0 kWh (2007)

Electricity - imports
2.315 billion kWh (2007 est.)

Oil - production
2.11 million bbl/day (2007 est.)

Oil - consumption
295,000 bbl/day (2007 est.)

Oil - exports
1.67 million bbl/day (2007 est.)

Oil - imports
NA bbl/day

Oil - proved reserves
115 billion bbl (1 January 2007 est.)

Natural gas - production
3.5 billion cu m (2007 est.)

Natural gas - consumption
980 million cu m
note: 1.48 billion cu m were flared (2005 est.)

Natural gas - exports
0 cu m (2005 est.)

Natural gas - imports
0 cu m (2005)

Natural gas - proved reserves
3.17 trillion cu m (1 January 2007 est.)

Current account balance
$7.802 billion (2007 est.)

Exports
$38.11 billion f.o.b. (2007 est.)

Exports - commodities
crude oil 84%, crude materials excluding fuels 8%, food and live animals 5%

Exports - partners
US 40%, Italy 13.7%, Spain 5.6%, Canada 5.5%, France 4.7%, Netherlands 4.6% (2006)

Imports
$24.81 billion f.o.b. (2007 est.)

Imports - commodities
food, medicine, manufactures

Imports - partners
Syria 29.9%, Turkey 19.3%, US 10.8%, Jordan 4.9%, China 4.6% (2006)

Economic aid - recipient
$21.65 billion (2005)

Reserves of foreign exchange and gold
$25.66 billion (31 December 2007 est.)

Debt - external
$100.9 billion (31 December 2007 est.)

Market value of publicly traded shares
NA

Currency (code)
New Iraqi dinar (NID) as of 22 January 2004

Exchange rates
New Iraqi dinars per US dollar - 1,255 (2007), 1,466 (2006), 1,475 (2005), 1,890 (second half, 2003)

Fiscal year
calendar year

 

 
 


 



 


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