Economy of Iraq

The economy of Iraq is dominated by the oil sector. The IFAD has classified Iraq as an oil-rich upper middle income country. In 2025, the economy is estimated to be at $690 billion (GDP PPP). making it as the fifth largest economy in the Arab world, seventh largest in the Middle East and North Africa and world's 51st largest. It is one of the top five Arab countries with gold reserves and 30th globally.

Iraq experienced economic growth in the 1970s. Oil industry was nationalized in 1972, followed by a sharp increase in the price of petroleum. Revenue generated from the oil sector were utilized in development and expanding social services, which turned Iraq into a highly developed country. However, the 1991 Gulf War and subsequent sanctions drained the country economically. An oil-for-food program by the United Nations allowed Iraq to sell oil in exchange of humanitarian goods for the civilian population.

Gradually, the economic situation quite improved. Many countries resumed trade with Iraq and the government rebuilt large swaths of country after the war. However, the invasion of Iraq in 2003 and the war damaged much of the country's infrastructure. Although economy expanded rapidly due to privatization, it was interrupted by escalating war. Since 2022, under the leadership of Prime Minister Muhammad Shayya al-Sudani, Iraq has seen a period of relative economic stability.

Iraq is traditionally an oil-rich state, with oil industry being the dominant sector. In 2024, it provided 89% of foreign exchange earning. Crude oil accounts between 92-99% of Iraq's total exports, followed by fruits, aluminum and dates. While import goods include foods, medicine and manufactured products such as ships, automobiles and consumer electronics. Major trade partners of Iraq are the United States, China, India, Greece, Turkey and the United Arab Emirates. Iraq has strong economic and trade ties with numerous countries, with large investments from China and Saudi Arabia.