Iraq leads Arab countries in GDP growth due to oil price surge – World Bank
According to a World Bank report, Iraq ranks higher than all Arab countries in terms of GDP growth in 2022 with 8.9 percent, exceeding the rest of the Arab countries, including Qatar, which is expected to grow by 4.9 percent, Saudi Arabia 7 percent, Kuwait 5.7 percent, UAE 4.9 percent, Algeria 3.2 percent, Egypt 5.5 percent, Jordan 2.3 percent and Morocco 4.3 percent. The World Bank’s April update on Iraq’s economy, predicts a fast track recovery for the Iraqi economy.
The growth has been attributed to the increase in oil prices and the easing of COVID-19 restrictions. This is based on the projection of 8.9 percent growth in Iraq’s GDP for the year 2022 in its April update. The rise of the COVID-19 pandemic accompanied by the drastic fall in oil prices and a case of political deadlock led to a significant economic downfall for Iraq in 2020, which recorded negative 8.6 percent GDP growth in that year.
The World Bank has released a new report stating that Iraq has recovered from the recession that it experienced in 2020 because it has become more dependent on non-oil economic activities and has improved market dynamics in the oil market. Despite the rise in oil prices globally, the report also mentions that the oil production in Iraq has also increased as a result of the tapering of OPEC+ production quotas.
Since its founding by Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela, the Organization of Petroleum Exporting Countries (OPEC) has grown to 13 members. OPEC controls more than half of the world’s oil reserves and has a significant impact on oil prices. OPEC+ is an alliance made up of OPEC members and non-member countries that export crude oil.
The report added that higher projected oil prices in 2022-2024 will significantly improve Iraq’s fiscal and external outlook. A gross amount of $11.07 billion was generated by the Iraqi oil industry during March, with an average price per barrel of 110.090 dollars. Non-oil sectors, mainly transportation, accommodation, and retail, contributed to the economic rebound, with growth of 6 percent in the first nine months of 2021.
In the meantime, a representative of the Food and Agriculture Organization (FAO) of the United Nations (UN) remarked that crop failures are expected to increase in Iraq as a result of a lack of rain, as well as drought in the Nineveh province. As of 2023, Iraq is projected to have a GDP growth rate of 4.5 percent and an inflation rate of 3 percent.