Economic Update – Baghdad
The Iraqi Ministry of Finance has reaffirmed its commitment to achieving financial sustainability that bolsters development and stimulates investment. In parallel, the International Monetary Fund (IMF) has expressed its support for Iraq in the formulation of financial policies.
According to a statement from the Ministry, the Iraqi delegation concluded discussions with the IMF in Amman from February 24 to 26, 2025. The delegation included Finance Minister Taif Sami Muhammad and the Governor of the Central Bank of Iraq. The discussions centered on Iraq’s economic performance and the outlook for sustainable growth, with progress acknowledged by both parties.
The statement further elaborated that the consultations, which involved experts from the ministries of finance, planning, oil, electricity, and the central bank, highlighted macroeconomic indicators. A notable growth in non-oil GDP was recorded at 5% for 2024, largely influenced by an expanding agricultural sector and increased public expenditure. Growth is expected to continue at a rate of 3.5% in 2025.
The mission emphasized that these figures demonstrate improved economic diversification and reduced reliance on oil, which enhances the overall stability of the national economy. The discussions also reviewed actual expenditures and projected revenues for 2024, along with anticipated scenarios for 2025 and strategies to address any potential deficits.
Furthermore, deliberations included updates to the public debt strategy, incorporating mechanisms aimed at ensuring overall financial sustainability and boosting investor confidence in government bonds. The IMF highlighted the importance of developing the banking sector to foster investment and attract foreign capital, which could lead to a more stable financial landscape.
The IMF reiterated its commitment to assisting Iraq in enhancing financial policies by providing consultancy and expertise to aid the Ministry of Finance in managing public debt and refining the tax system in alignment with economic growth requirements.
In line with the agenda for promoting financial stability, the two parties agreed to intensify efforts to expand collaboration with international banks. This initiative aims to facilitate foreign trade financing operations and promote the increased utilization of the Iraqi dinar in significant transactions to strengthen the national currency.
The meetings underscored the ongoing progress in financial and economic reforms, reflecting the Iraqi government’s unwavering commitment to establishing financial sustainability that fosters development and encourages investment, supported by a continuous strategic partnership with the IMF.
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