World Bank projects Iraqi economy to shrink in 2026

Baghdad (IraqiNews.com) – The Iraqi economy would fall by 2.2 percent in 2026, before falling even more to 8.9 percent in 2027, according to the World Bank’s ‘Global Economic Prospects’ report released in June 2026. Iraq’s economic output grew by 0.5 percent in 2024; however, according to estimates, it contracted by 1.5 percent in 2025 before continuing its downward trajectory in 2026. It is expected to rebound to a 12.2 percent growth rate in 2028. According to the analysis, Iraq’s economy is one of the most vulnerable to regional developments, with its growth forecast lower compared to several other Middle Eastern oil-producing countries. According to the report, Saudi Arabia’s economic output would increase by 3.1 percent in 2026 and the UAE’s by 2.4 percent, while Kuwait’s economy is expected to contract by 6.4 percent. The International Monetary Fund (IMF) revealed earlier Iraq will be one of the economies most affected by regional turmoil in 2026, with major consequences for inflation rates and state budgets. Iraq is among a small group of nations facing increased challenges due to the interruption of commercial movement and high costs of transportation, as well as the impact of military confrontations on trade exchange routes, particularly those that cross the Strait of Hormuz, according to the IMF. The post World Bank projects Iraqi economy to shrink in 2026 appeared first on Iraqi News.