IMF sees Iraq’s economy contracting 6.8% in 2026

Iraq’s economy is expected to contract by 6.8 per cent in 2026 before rebounding strongly in 2027, as regional conflict disrupts energy production and trade flows, the International Monetary Fund (IMF) said on Tuesday.

In its latest World Economic Outlook, the IMF forecast Iraq’s economy would shrink by 6.8 per cent in 2026, reflecting disruptions to oil output and export logistics. Growth is projected to rebound to 11.3 per cent growth in 2027, assuming normalisation of energy production and transportation networks across the region.

The Fund said Iraq is among several economies, including Iran, Bahrain, Kuwait, and Qatar, expected to contract in 2026 due to damage to energy infrastructure and limited access to alternative export routes.

Like other oil-exporting countries, Iraq faces pressure from disruptions to energy infrastructure and key shipping routes, including the Strait of Hormuz, the IMF said.

However, the outlook remains uncertain, with risks tied to the duration and intensity of the conflict and its impact on global energy markets.

Attribution: Amwal Al Ghad English