The improvement of economic performance in Iraq will rise to 4.1% in 2025, according to the International Monetary Fund’s latest projections. This follows a weak 0.1% growth rate in 2024 and signals a strong recovery.
Among Arab oil-producing countries, Iraq ranks fourth in projected growth. Libya leads the region with an impressive 13.7% forecast. The United Arab Emirates follows at 5.1%. Meanwhile, Saudi Arabia holds third place with 4.6%.
Algeria ranks fifth with a 4% forecast. In contrast, Kuwait expects 3.3% growth, and Bahrain projects 3.2%. Oman predicts a 3.1% increase, while Qatar lags with 1.9%.
Several factors support the business development of Iraq this year. Most notably, higher oil production and stable prices have boosted national revenue significantly. Additionally, the government expanded public spending on infrastructure, education, and healthcare.
Furthermore, officials rolled out new job programs and encouraged investment in non-oil sectors. These actions have increased both confidence and employment opportunities for young workers.
The private sector began responding to reforms by launching more local businesses and creating new partnerships. However, Iraq success also depends on external conditions. For instance, global oil demand and geopolitical tensions could impact future revenue.
Meanwhile, Libya’s growth relies on resumed oil output and rising foreign interest. The UAE thrives on tourism, finance, and digital innovation. Likewise, Saudi Arabia benefits from steady reforms under its Vision 2030 plan.
Despite challenges, the economic sector of Iraq reflects resilience and recovery. Policymakers worked hard to stabilize currency markets and rebuild trade links. Moreover, Iraq strengthened regional partnerships to attract long-term investment.
Still, experts warn Iraq must diversify its economy. While oil remains vital, the country cannot depend on it forever. Therefore, officials now focus on agriculture, industry, and digital transformation.
Overall, the IMF report shows renewed strength across Arab oil economies. Encouragingly, Iraq’s recovery places it among the top performers in 2025.
