IMF says Iraq economy to boom
Unprecedented growth credited to country’s oil wealth and spiralling prices.
Published On 17 Jan 2008
The fund expects a “significant jump in growth” as oil production increases and retail services improve.
However, Iraq, which is struggling to recover after a US-led invasion nearly five years ago, “will continue to need aid, particularly in the security area”, Khan said.
Oil wealth
Oil production accounts for 70 per cent of the country’s GDP activity.
The IMF predicts that Iraq will produce an extra 200,000 barrels per day in 2008, bringing the country’s daily output to 2.2 million barrels.
| Iraq’s economy |
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– 7% predicted growth in Iraq’s gross domestic product (GDP) – Annual consumer prices inflation expected to decline to 12%. – Extra 200,000 barrels of oil production predicted per day. – Oil accounts for 70% of Iraq’s GDP. |
Surging oil prices have recently boosted Iraq’s oil revenues to $27bn, $6bn higher than projected.
The IMF approved a $744m credit for Iraq on December 19, just a week after the country paid off an earlier $471m loan.
Foreign exchange reserves ballooned to $27bn at the end of 2007 from $20bn the prior year.
The IMF’s 2008 programme for Iraq is based on oil priced at $55-57 a barrel.
John Foster, deputy editor of Dubai-based Banker Middle East, told Al Jazeera that the Iraqi economy has gone from zero to growth.
“Before the invasion corruption was endemic. After the invasion basically they had a blank sheet. With the removal of sanctions, the oil started flowing and thats been powering Iraqi economy.”
“They are trying to grow small-to-medium sized enterprises which are run by local Iraqi people,” Foster said.
Source: Al Jazeera, News Agencies