Inflation rate in Iraq drops to 0.8% in 2025, marking the lowest level in recent years. The Central Bank of Iraq announced the decline after reviewing the second half of 2025. According to the report, the rate fell by 76 percent compared to previous figures, showing remarkable progress.
The Central Bank stated that inflation had reached 3.3 percent in the second quarter of 2024. However, the latest data revealed a sharp reduction to just 0.8 percent. Therefore, Iraqi households and businesses can now enjoy stronger purchasing power. Lower prices across goods and services will directly benefit both families and companies.
Moreover, the Ministry of Planning confirmed a steady decline in inflation during mid-2025. In June, the monthly inflation rate in Iraqi marketplaces fell by 1.2 percent compared to May. Additionally, annual inflation decreased by 0.6 percent when compared with June 2024. These figures reflect a continuing trend toward greater economic stability.
Furthermore, spokesperson Abdul Zahra al-Hindawi emphasized that falling prices covered major provinces across the country. Consequently, essential goods became more affordable, easing financial pressure on many Iraqi families. At the same time, businesses experienced reduced costs, supporting growth and recovery.
International reports also highlighted Iraq’s improving economic outlook. The International Monetary Fund published a study in April that predicted a gradual fall in inflation. According to the IMF, Iraq recorded 2.6 percent inflation in 2024, down from 4.4 percent in 2023 and 5 percent in 2022. Importantly, the IMF projects inflation will stabilize at 2.5 percent in 2025 before moving to 2.7 percent in 2026. By 2030, it may reach three percent, which remains manageable compared to earlier years.
Clearly, Iraq’s declining inflation signals growing financial stability. As inflation rate in Iraq drops further, policymakers expect stronger economic resilience. Lower inflation strengthens household savings, encourages business expansion, and supports investment in essential sectors. Therefore, the sharp drop in inflation represents an encouraging step toward sustainable economic growth in Iraq.
