(MENAFN) A recent report from the International Monetary Fund (IMF) outlines optimistic expectations for Iraq's economic trajectory, citing ongoing financial expansions as drivers of growth. The IMF underscores the imperative for Iraq to shift away from heavy reliance on oil revenues, emphasizing the urgency of implementing significant financial reforms to ensure fiscal sustainability while upholding social spending and essential investments.

Highlighting notable progress, the report indicates a robust recovery in Iraq's non-oil sector throughout 2023, accompanied by a notable decline in inflation rates. According to IMF assessments, Iraq's real non-oil GDP exhibited a commendable 6 percent growth in 2023, effectively reversing the stagnation witnessed in the preceding year.

However, the IMF cautions against potential risks that could pose challenges to Iraq's financial and external stability, such as a decline in oil prices or an extension of production cuts by the OPEC+ alliance. To mitigate these risks, the IMF advises Iraq to prioritize the pursuit of higher and more sustainable growth within the non-oil sector, which is essential for accommodating the country's expanding workforce.

The IMF's prognosis underscores the importance of Iraq's ongoing economic diversification efforts and the imperative of bolstering the non-oil sector to ensure long-term resilience and prosperity. As Iraq navigates these challenges, sustained commitment to structural reforms and prudent economic management will be essential for fostering inclusive growth and mitigating vulnerabilities in the face of external uncertainties.

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