PARLIAMENTARY COMMITTEE: IRAQ IS HEADING TOWARDS A MAJOR INVESTMENT AND ECONOMIC BOOM
The Parliamentary Investment and Development Committee confirmed, today, Monday, December 23, 2024, that Iraq is heading towards a major investment and economic boom during the next stage.
Committee member Mohammed Radhi told Baghdad Today, “The stability achieved at the political, security and governmental levels will lead to important and large investment opportunities during the next phase, and this will generate great prosperity at the economic level, and this will lead to an important construction leap in various infrastructures.”
Radhi added, “The Iraqi government has achieved successes in the investment file and strengthening the economic and financial conditions, and these successes have been positively reflected in the services, reconstruction and development file, and the next stage will show these successes more clearly through investment and economic prosperity at various levels.”
In April 2024, the International Monetary Fund expected the Iraqi economy to grow by 1.4% in 2024 and 5.3% in 2025, and urged structural reforms and debt stabilization.
The Iraqi government also announced a decrease in unemployment from (16.5%) to (14.4%), a reduction in the poverty rate from (23%) to (17%), a decrease in the inflation rate from (6.1%) in 2021 to (2.5%), and an increase in non-oil revenues to (14%), after representing (7%) of the budget.
😊I need to address one more important article today titled “THE ROAD AHEAD FOR IRAQ’S UNDERDEVELOPED STOCK MARKET”. In the article it tells us that
Iraq’s stock market (ISX) is considered a vital pillar. Oh… that’s the Pillars of Financial Reform again. Oh…. I get it…. Do you?
Also, in this article it talks about channeling savings into investments and it remains underdeveloped and overshadowed by regional counterparts.
Authorities are striving to revitalize the market to attract investors and promote economic diversification, however, challenges such as political instability, limited industrial and agricultural sectors, and bureaucratic hurdles continue to impede it’s progress.
In other words there is still work to be done and the capital flow into the ISX is not at satisfactory levels.
Can this drag on the implementation of the RV? I will ask my CBI contact over the weekend but I think the RV would only facilitate more investors to go the ISX. So the RV would be a positive event.
DURING 2025.. CAUTIOUS ANTICIPATION OF THE ECONOMIC AND FINANCIAL REALITY IN IRAQ
Economic expert Ahmed Al-Tamimi confirmed today, Sunday (December 22, 2024), that Iraq is heading towards a cautious situation regarding its economic and financial situation during the year 2025.
Al-Tamimi told Baghdad Today: “Expectations and data confirm that Iraq is facing hot events at the beginning of the new year, and these events will have repercussions and reflections on the country’s financial and economic reality, especially with the imminent assumption of the presidency of the White House by US President-elect Donald Trump, and the fear of imposing some sanctions and financial tightening on Iraq in order to limit the smuggling of the dollar as well as limiting the Iranian role through these economic pressures.”
He added, “There is extreme caution regarding the financial and economic reality of Iraq at the beginning of the new year, especially since the Iraqi economic situation is greatly affected by any security or political event, and for this reason everyone is anticipating the coming days, and this matter has led to a decline in the buying and selling of real estate and other valuable items, for fear of any expected economic and financial shock.”
The Parliamentary Finance Committee confirmed last Monday that the situation in Syria does not affect the Iraqi economy or the dollar exchange rate in the local market, noting that “the government and the Central Bank have taken several important measures to confront the security and economic challenges in the country, especially in light of the deteriorating situation in Syria.”
“REASONS FOR THE DELAY IN SENDING GENERAL BUDGETS IN IRAQ AND ITS ECONOMIC REPERCUSSIONS” ...Iraq is trying desperately to fix the system they have in place of budgeting. The article tells us the system has been an ongoing issue and needs to be fixed. It lists the issue involved and is very informative.
I will tell everyone...The hold up of the budget is NOT about the RV...I can tell you for sure with 1000% assurance the hold up of the budget implementation is NOT due to waiting for the new RV rate.
THE ROAD AHEAD FOR IRAQ’S UNDERDEVELOPED STOCK MARKET
Iraq’s stock market considered a vital pillar for channeling savings into investments, remains underdeveloped and overshadowed by regional counterparts. Authorities are striving to revitalize the market to attract investors and promote economic diversification, however, challenges such as political instability, limited industrial and agricultural sectors, and bureaucratic hurdles continue to impede progress.
Market Overview
The Iraq Stock Exchange (ISX) was established in 1992 as the Baghdad Stock Exchange under Law No. 24 of 1991. It was later renamed in 2003, listing 113 private and mixed companies at its inception. However, despite its long history, the ISX lags behind neighboring markets in trading volume and overall activity.
Foreign investors remain hesitant, citing Iraq’s political and economic instability, as well as complex administrative and legal procedures for opening accounts and transferring profits. These barriers contribute to the market’s small size and limited appeal.
Economic Challenges and Market Dynamics
Muzher Mohammed Saleh, financial advisor to Iraq’s prime minister, highlighted the structural issues plaguing Iraq’s economy. “The country inherited a mono-reliant economy heavily dependent on oil revenues, exacerbated by decades of war, sanctions, and economic isolation,” Saleh told Shafaq News.
“Unfortunately, the industrial and agricultural sectors, which are essential for diversifying the stock market, are significantly weak.”
These two sectors collectively contribute only 6–7% of Iraq’s GDP, according to Saleh, with most activities being individual rather than corporate. He revealed that the stock market’s underdevelopment mirrors the broader structure of Iraq’s economy, where banking institutions dominate due to the liberalized, oil-dependent economy.
Notably, over 50% of ISX’s activity stems from banking institutions.
“The government’s new economic strategy focuses on fostering a production-oriented partnership between the public and private sectors to enhance economic diversification,” Saleh added. He noted that the success of the stock market hinges on achieving broader economic diversity and strengthening foundational sectors like industry and agriculture.
Market Constraints
While regional markets in the Gulf and North Africa have modernized rapidly, Iraq’s stock market has struggled to keep pace. Broker Mohammed Madloul pointed out that neighboring markets like Egypt and the UAE provide 24-hour stock price tickers in public spaces, allowing citizens to trade shares outside traditional hours. By contrast, trading in Iraq is restricted to specific hours, limiting transaction opportunities.
“In Iraq, the market’s size and activity are constrained,” Madloul said. “Many stocks trade at values below one Iraqi dinar, reflecting the limited scope of investments.” However, he acknowledged some progress in the banking sector, noting that the market capitalization of listed companies grew from 6.88 trillion dinars (about $5.2 billion) in 2021 to 10 trillion dinars in 2024 (about $7.6 billion.)
“This growth highlights a potential for expansion, albeit focused heavily on the banking sector.”
Weak Private Sector
Economic expert Durgham Mohammed Ali attributed the ISX’s small size to the lack of large companies and a strong private sector in Iraq. “The market reflects the weak state of Iraq’s developmental sectors and the public’s lack of trust in it,” Ali told Shafaq News. “The ISX remains technically underdeveloped compared to Gulf markets.”
Ali criticized the lack of efficient investment portfolio management and regulatory constraints imposed by the ISX’s oversight body. “These restrictions limit the operations of brokerage firms and discourage robust investment activities,” he said. “The performance of the market is directly tied to the efficiency of listed companies, which remain weak.”
Modernization Efforts
Despite these challenges, efforts are underway to modernize Iraq’s stock market. Taha Ahmed Abdul-Salam, ISX’s executive director, stressed the importance of stability and long-term corporate vision for attracting investors.
“The number of listed companies has increased from 105 to 107, and we are working to add more,” Abdul-Salam told Shafaq News. “This expansion is essential for attracting new investors.”
Abdul-Salam revealed that the ISX has signed an agreement with the Egyptian Exchange to implement a new Order Management System (OMS), enabling investors to trade via smart devices. “We expect to launch this system by June or July next year,” he said. This modernization is seen as a critical step toward making the market more accessible and competitive with regional counterparts.
