IMF says Iraq will be among most affected by regional shocks in 2026

BAGHDAD, Iraq — The International Monetary Fund said Iraq will be among the economies most affected by regional shocks in 2026, warning that the impact would be felt in inflation, external accounts and public finances. In its report, the IMF said disruptions to trade flows and higher transport costs are putting Iraq under pressure from two sides. It added that Iraq and Iran are facing the heaviest negative strain in the region on their external and fiscal balances. The fund said any potential benefit from higher oil prices would not be enough to offset trade losses and a slowdown in economic activity. It also said inflation expectations in Iraq were rising because of higher import costs and higher prices for goods.