Iraq has emerged from a period of considerable instability, with a new, concerted focus on growth and rebuilding. With this, Iraq will pounce on any opportunity that comes her way in pushing this agenda forward. The country has managed to maintain healthy reserve, which will serve to facilitate easier cross-border transfer of funds as well as importation and exportation of goods and services. Moreover, its attractive legal framework will go a long way to protecting the incentives of investors from overseas to tap into the growing potential the country has to offer as the economy continues to show progress.
Following the end of recent difficulties, Iraq now faces the task of rebuilding in terms of economic stability, infrastructure, and security. With the vast presence of oil and gas in the land of Iraq, the overall GDP is estimated to shoot up by up to 6.2% this year. The minister for oil, Thamir Ghadhaban, has recently talked about the focus on southern oil fields and that the government is close to reaching further deals with international oil companies. With these plans, Iraq aims at producing oil at the rate of 5 million barrels per day, with Ghadhaban talking positively about this upgrading of capacity.
Following the 2019 budget bill that was just recently approved, the country has registered large spending particularly in line with reconstruction in the post-war era. This budget is highly reliant on the oil exports and for this reason, there will be more focus on the country's oil industry leading to greater development throughout 2019. The country seeks to seize every chance it gets and this industry is a key provider of such opportunities.
The continuing fluctuation in global oil prices presents ongoing opportunities within Iraq, driving the predicted GDP growth. Iraq is OPEC's second largest oil producer and if the prices go up as expected, Iraq will get to export more oil at a highly profitable price. This year, some predict that the price of a single barrel of oil may rise to more than $75 and this will not only benefit OPEC's second largest oil producer through sales but also through the increasing number of ambitious investors seeking to invest in Iraq's oil industry as the country is now a safe place to be and investor confidence is beginning to peak once more.
Moreover, this increase in oil prices has lowered the public dept to GDP ratio in Iraq and given the country a boost in its foreign exchange reserves. Iraq is highly reliant on oil as its major source of income, with nearly 80% of government revenue being tapped from this flourishing industry. Therefore, this year's predicted growth in Iraq's oil industry is highly beneficial.
Growth in construction
With the country's focus on recovery and reconstruction, Iraq's construction sector is set to grow further this year. The efforts to rebuild the country have soon been followed with heavy investment in the construction sector. The Iraqi government recently approved an 18% increase in the annual budget which translates to an outstanding 49% increase in spending on infrastructural developments. This is the largest increment ever seen and analysts believe that it will help to lift the construction sector throughout the year. Analysts also predict that the recovery in oil prices will have a positive impact upon this sector, supporting the government in injecting funds for the reconstruction of property damaged during recent conflicts, with a key focus on transport infrastructure, healthcare centres, education facilities, and the post-war housing projects.
The power sector
Appealing to the Iraqi trust fund, Iraq's ambitious plans to transform one of its most crucial economic sectors led it to develop an Integrated National Energy Strategy. The blanket effect of this strategy does not only seek to benefit the oil and gas industry but also boost the electricity and power sector. After the decline in oil production a decade ago, Iraq suffered a prolonged period of domestic energy shortage characterised by an unmet demand for electricity which was costly to the Iraqi economy. Amidst the post-war reconstruction era, multinational energy and industrial companies such as Shell, Siemens, Chevron and General Electric are working hand in hand with the Iraqi electricity ministry to turn the sector around. These multinationals have shown great interest in securing power generation contract as Iraq seeks to regrow from the ashes of the war. For instance, General Energy secured a $15 billion contract to generate 14 Gigawatt of power for the country. Moreover, as General Electric CEO Russel Stoke put it, over 65,000 jobs will be created from this and with more prospective investors coming in, these numbers will definitely continue to rise this year and beyond.
In modern society, science and technology have been at the forefront of innovation and economic development of many nations globally. Over the years of decline in the energy sector and slow development in the economy at large especially amidst times of conflict, technology across most of the Iraqi economic sectors diminished greatly. However, in the era of rebuilding, the tech sector will likely recuperate with a more vigorous transfer of scientific knowledge both within Iraq and beyond. The war had rendered the country unreachable by cutting it off from the rest of the world and this recovery is an opportunity for the country to realise the benefits of tech, which would allow the developing country to dive head first into the evolution of the modern globalised business world. Furthermore, technology is dependent on a steady power supply which is currently being re-established all over Iraq and this year. Iraq is an untapped market with great potential as it is increasingly becoming a fertile ground for a diverse investment in tech following the economic development it continues to realise.