Statistics and Overview of Iraq Economy

Overview

Iraq's economy is dominated by the petroleum sector, which has traditionally provided about 95% of foreign exchange earnings. In the 1980s, financial problems caused by massive expenditures in the eight-year war with Iran and damage to oil export facilities by Iran led the government to implement austerity measures, borrow heavily, and later reschedule foreign debt payments; Iraq suffered economic losses of at least $100 billion from the war. After the end of hostilities in 1988, oil exports gradually increased with the construction of new pipelines and restoration of damaged facilities.

Economic sanctions of the 1990s

Iraqs seizure of Kuwait in August 1990, subsequent international economic sanctions, and damage from military action by an international coalition beginning in January 1991 drastically reduced economic activity. The government's policies of supporting large military and internal security forces and of allocating resources to key supporters of the regime have exacerbated shortages. The implementation of the UN's Oil for Food program in December 1996 has helped improve economic conditions. For the first six six-month phases of the program, Iraq was allowed to export limited amounts of oil in exchange for food, medicine, and other humanitarian goods. In December 1999, the UN Security Council authorized Iraq to export as much oil as required to meet humanitarian needs. Oil exports are now about three-quarters their prewar level. Per capita food imports have increased significantly, while medical supplies and health care services are steadily improving. Per capita output and living standards are still well below the prewar level, but any estimates have a wide range of error.

Iraq's economy is characterized by a heavy dependence on oil exports and an emphasis on development through central planning. Prior to the outbreak of the war with Iran in September 1980, Iraq's economic prospects were bright. Oil production had reached a level of 560,000 m³ (3.5 million barrels) per day, and oil revenues were 21 billion in 1979 and 27 G$ in 1980. At the outbreak of the war, Iraq had amassed an estimated 35 billion in foreign exchange reserves.

The Iran-Iraq War depleted Iraq's foreign exchange reserves, devastated its economy, and left the country saddled with a foreign debt of more than $40 billion. After hostilities ceased, oil exports gradually increased with the construction of new pipelines and the restoration of damaged facilities.

Iraq's invasion of Kuwait in August 1990, subsequent international sanctions, and damage from military action by an international coalition beginning in January 1991 drastically reduced economic activity. Government policies of diverting income to key supporters of the regime while sustaining a large military and internal security force further impaired finances, leaving the average Iraqi citizen facing desperate hardships. Implementation of the UN oil-for-food program in December 1996 improved conditions for the average Iraqi citizen. Since 1999, Iraq was authorized to export unlimited quantities of oil to finance humanitarian needs including food, medicine, and infrastructure repair parts. Oil exports fluctuate as the regime alternately starts and stops exports, but, in general, oil exports have now reached three-quarters of their pre-Gulf War levels; per capital output and living standards remain well below pre-Gulf War levels.

The economic sanctions were fully lifted in 24 May 2003, shortly after Saddam Hussein was overthrown. This resulted in economic growth of 53% topping the list of the world's fastest growing economy.

Agriculture

Despite its abundant land and water resources, Iraq is a net food importer. Under the UN Oil for Food program, Iraq imported large quantities of grains, meat, poultry, and dairy products. The government abolished its farm collectivization program in 1981, allowing a greater role for private enterprise in agriculture. The Agricultural Cooperative Bank, capitalized at nearly 1 G$

Importation of foreign workers and increased entry of women into traditionally male labour roles have helped compensate for agricultural and industrial labour shortages exacerbated by the war. A disastrous attempt to drain the southern marshes and introduce irrigated farming to this region merely destroyed a natural food producing area, while concentration of salts and minerals in the soil due to the draining left the land unsuitable for agriculture.

Other statistics

Household income or consumption by percentage share:

lowest 10%: NA

highest 10%: NA

Agriculture - products: wheat, barley, rice, vegetables, dates, cotton; cattle, sheep, poultry

Industrial production growth rate: NA

Electricity:

production: 32,600 GWh (2004)

consumption: 33,700 GWh (2004)

exports: 0 kWh (2004)

imports: 1,100 GWh (2004)

Electricity - production by source:

fossil fuel: 98.4%

hydro: 1.6%

other: 0% (2001)

nuclear: 0%

Oil

production: 2.25 million barrel/day (2004 est.); note - prewar production (in 2002) was 2.03 million barrel/day (2004 est.)

consumption: 383,000 barrel/day (2004 est.)

exports: 1.49 million barrel/day (2004 est.)

imports: NA

proved reserves: 112.5 billion barrel (2004 est.)

Natural gas:

production: 2.35 km³ (2002 est.)

consumption: 2.35 km³ (2002 est.)

exports: 0 m³ (2004 est.)

imports: 0 m³ (2004 est.)

proved reserves: 3,149 km³ (2004)

Current account balance: $-560 million (2003 est.)

Exports - commodities: crude oil (83.9%), crude materials excluding fuels (8.0%), food and live animals (5.0%)

Imports - commodities: food, medicine, manufactures

Exchange rates: New Iraqi dinars per US dollar - 1,470 (second half, 2005)

Economy of Iraq

Currency New Iraqi dinar (NID) as of 22 January 2004

Fiscal year Calendar year

Trade organisations OPEC

Statistics

GDP ranking 60th (2004 est.) [1]

GDP $89.8 billion (2004 est.)

GDP growth 52.3% (2004 est.)

GDP per capita $3,500 (2004 est.)

GDP by sector

agriculture (13.6%), industry (58.6%), services (27.8%) (2004 est.)

Inflation 25.4% (2004 est.)

Pop below poverty line NA

Labour force 6.7 million (2004 est.)

Labour force by occupation NA

Unemployment 25% to 30% (2004 est.)

Main industries

petroleum, chemicals, textiles, construction materials, food processing, fertilizer, metal fabrication/processing

Trading Partners

Exports $10.1 billion f.o.b. (2004 est.)

Main partners US 54.7%, Canada 9.8%, Italy 8.8%, ROC (Taiwan) 4.2%, Jordan 4.2% (2003)

Imports $9.9 billion f.o.b. (2004 est.)

Main Partners Turkey 18.7%, Jordan 12.3%, Vietnam 11%, US 7.1%, Germany 5.2%, UK 4.9% (2003)

Public finances

Public debt NA

External debt $125 billion (2004 est.)

Revenues $17.1 billion (2004)

Expenses $28.2 billion, including capital expenditures of $5.6 billion (2004 budget)

Economic aid more than $33 billion in foreign aid pledged for 2004-07 (2004

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