A World Bank report warned that the delay in forming a government in Iraq and of not approving the budget will have an adverse impact on country’s economy.
The World Bank report said, “Iraq is gradually emerging from the deep recession that it experienced in 2020 due to the Corona Virus (Covid-19) pandemic and the collapse in oil prices.”
The report said, “After a contraction of over 11% in 2020, the Iraqi economy achieved a growth rate of 2.8 percent in 2021 with the easing of restrictions imposed by the Corona pandemic on movement, and this growth was supported by a strong expansion in non-oil production, especially in the services sector.”
The report added, “With the gradual cancellation of the OPEC + production cuts, oil GDP also began to grow in the second half of 2021, and the rise in oil revenues prompted a surplus in public financial balances and total external balances in Iraq in 2021.”
The report quoted Saroj Kumar Jah, Regional Director of the Orient Department at the World Bank, as saying, “Iraq has a unique opportunity to undertake urgent and wide-ranging structural reforms through three means, taking advantage of the fiscal space resulting from its recent sudden oil revenues.”
“Secondly, redirecting government spending towards programs improving growth is critical to economic diversification and job creation, and thirdly, addressing the country’s human capital crisis,” he said.
The World Bank report confirms, “The current food security challenges in Iraq have intensified in the midst of the current rise in global commodity prices.”