I wanted to find out how Iraq's economy is doing now and this also came up in Scooter's chat so I have provided the below. Hope this is beneficial to you all.
Ok, first for some key indicators....some of these numbers are rounded.
Population: 32.8 million
GDP (PPP): $127.6 billion, 9.9% growth, 5.1% 5-year compound annual growth, $3,886 per capita
Inflation (CPI): 6.0%
FDI Inflow: $1.6 billion
An improving security environment and foreign investment are helping to spur economic activity.....especially in the energy, construction, and retail (believe it or not!)sectors.
Iraq's largely state-run economy is dominated by the oil sector, which provides more than 90% of government revenue and 80% of foreign exchange earnings.
Read More Link On Right
Iraq in 2012 boosted oil exports to a 30-year high of 2.6 million barrels per day! Because of this, Government revenues increased as global oil prices remained high for much of 2012.
According to recent international estimates Iraq is expected to earn $5 trillion from oil exports up to 2035. Yet despite having reserves of 143 billion barrels, and awarding concessions to international oil companies (IOCs) for field development both in the north and south, it has yet to exceed its peak production of approximately 3.8mn b/d in 1979.
Natural gas is positioned to contribute significantly to Iraq’s future by reducing the importance of oil in Iraq’s management of natural resources.
Currently nearly 1 billion cubic feet of gas is flared every day in southern Iraq as a by-product of oil production.
We all know Iraq is operating well below its potential and imo, this is due to security concerns, political impasses and a perception that needs to be redefined to the investing public.
I think it also goes without saying that the economy lacks effective monetary and fiscal policies. The weak state of the financial system, coupled with its limited role within the economy, hampers both investment and the everyday operation of businesses. In fact, on average, launching a business takes more than 70 days, and obtaining operating licenses can take over 150 days.
I listed GDP above and wanted to break it down by sector. First of all, GDP (Gross Domestic Product) is basically the value of all goods and services, in their final state or form, within a country. To calculate it, the equation is GDP = C + G + I + NX.
To spell that out (lol), "C" is consumer spending, "G" is gov't spending, "I" is business capital spending and "NX" is net exports.
Ok, here is the breakdown by sector:
Iraq ranked as the 7th fastest growing economies, expected to be around 9% with a GDP around 150bn this year. We know this is almost entirely due to the oil industry so the challenge for Iraq is to grow the non-oil sector and investment.
Here is an excerpt from a neat article I found that talks about the next five years for Iraq. This one projects growth this year to more than 11%.
The Iraqi economy saw one of the fastest growth rates globally in 2012. It grew by 10.5% to just over USD 100 billion and is set to grow by more than 11% in 2013. Beyond that, Iraq is expected to continue to record growth averaging 9% in the years to 2017.
The Government’s fiscal surplus will likely average some 4% of GDP, in spite of heavy spending in public capital projects and the oil and gas infrastructure. Some 30% of the budget is set aside for investment in, i.a., infrastructure and electricity generation.
Massive opportunities are in Iraq....everyone knows it. So much progress is going on and we all stand at the precipice of a monetary policy change.
I hope this was informative and beneficial for you all.