With oil accounting for approximately 90% of government revenues in Iraq, the oil sector continues to have a dominant role within the local economy. Despite recent signs of an upturn, the low oil prices that have been in evidence over a prolonged period has put pressure on government finances.
Against this backdrop, however, there have clearly been signs of improvement. A more stable situation within the country is reflected in population growth, with the population reaching 37 million individuals by the end of 2016.
GDP per capita has also grown, reaching US$6,231 in 2014, up from a level of US$5,687 in 2011. The unemployment rate has remained fairly static, at around 15-16% during the past 5 years.
Levels of public debt appear to be manageable, at less than 40% of GDP. Analysts offer a range of views on likely growth during 2016 and economic predictions are difficult to make, even for those with considerable experience in the region. There are suggestions, however, that GDP might be expected to grow by around 2.5% during the course of the year.
The strength of the oil sector is likely to have a significant impact, with the recent recovery to around US$45 per barrel certainly leading to a more positive outlook for some. There will almost inevitably be a lag in the recovery for some producers, while there are also questions about the strength of the global economy. As levels of production shift, the focus will increasingly be on levels of demand: the recent weakening in the Chinese economy, in particular, is something that is being closely examined by many within this sector. With 99% of all export revenues being generated by oil, there will certainly continue to be a focus on this sector.
There are clearly still challenges within the local economy and the government have looked to support from outside bodies, with the World Bank providing US$1.2 billion in late 2015. Support has also been provided by the IMF.
Many international firms have been investing in Iraq, recognising that there are opportunities here and that there is a vibrant population. Here at MSELECT, we take an active role in bringing together employers and prospective employees. We’re able to handle all elements of the recruitment process, meeting the requirements of firms throughout Iraq and the wider region. If you need assistance with meeting your recruitment needs, then don’t hesitate to get in touch.