Iraq Economic Growth 2025 Improves with IMF and World Bank Forecasts
The Iraq economic growth 2025 outlook has significantly improved, according to the latest forecasts by the International Monetary Fund (IMF). During its most recent update, the IMF revealed that Iraq will achieve the fourth-highest growth among Arab oil producers next year.
The IMF predicted a 4.1 percent increase in Iraq’s GDP in 2025. That’s a sharp rise compared to just 0.1 percent in 2024. Libya leads the forecast with 13.7 percent growth. The UAE follows with 5.1 percent, then Saudi Arabia at 4.6 percent, and Algeria at four percent.
Earlier in May, the IMF revised its regional forecasts downward. Middle Eastern and North African oil exporters, including Iraq, saw reduced projections. The IMF now expects 2.3 percent regional growth in 2025. This is 1.7 percentage points below its October estimate.
Despite the downgrade, Iraq remains an exception, thanks to oil sector recovery and public investment efforts. The Iraq economic growth 2025 trend is also supported by the World Bank. In June, the bank projected a 1.2 percent rebound for Iraq’s economy. This marks a turnaround from the 1.5 percent contraction Iraq experienced in 2024.
Furthermore, the World Bank expects Iraq’s economy to peak at 4.4 percent in 2026. Growth may decline to 3.1 percent in 2027. Jean-Christophe Carret, World Bank Country Director for the Middle East, reaffirmed the bank’s continued support for Iraq. He emphasized the importance of sustainable growth and strong economic institutions in Iraq.
In March, Carret also noted that the World Bank prioritizes Iraq’s development goals. These include capacity building and long-term economic stability. As a result, Iraq now has better chances of meeting both short-term targets and long-term development plans.
With more global attention and regional shifts, the Iraq economic growth 2025 outlook appears stronger than before.
