IMF Projects Iraq Among Economies Most Exposed to Regional Instability in 2026

BAGHDAD, Iraq — The International Monetary Fund projected Iraq will be among the economies most exposed to regional instability in 2026, according to an IMF report. The report said Iraq faces mounting challenges from trade disruptions and elevated transportation costs. Military conflicts in the Middle East are weighing on commercial routes, particularly those passing through the Strait of Hormuz. Financial stability indicators have fallen below earlier projections. Iraq and Iran emerged as the countries facing the heaviest fiscal and external balance pressures in the region. Trade losses and a contraction in economic activity outpaced potential gains from higher oil prices, the report found. Inflation forecasts for Iraq increased compared with other Gulf Cooperation Council states. The findings highlight Iraq's vulnerability to regional instability in terms of supply chains and foreign trade costs.