In this report we examine some of Iraq’s economic trends in 2019, how they were impacted by COVID-19 and how private and public enterprise has adapted to the crisis in 2020.
As has been the case with much of the world, Iraq’s public and private sectors have scrambled to adapt to COVID-19. Iraq’s near to medium term economic outlook is highly fragile, underlining what Khudairi Group Managing Partner Mohammed Khudairi describes as the need to create, “A roadmap to moving the economy away from just oil revenue due to the uncertainty and unreliable nature of the oil and gas market.”
Nascent private sector activity is driven by an oversized public sector; the latter is retrenching as salaries are cut or delayed and Iraq faces operational expense shortfalls of over $2.5bn per month.
In the macroeconomic picture, Iraq’s Central Statistical Organization (ICSO) reported a per capita income decline of 12.3% for Q1 2020 while the Ministry of Labor predicted a 12% increase in poverty levels, to over 34%. According to UNAMI, the poverty rate may even reach 40% this year due to the ravages of the virus.