World Bank says Iraq economy heavily dependent on commodity revenues

BAGHDAD, Iraq — The World Bank has classified Iraq among developing economies that remain heavily dependent on commodity revenues, particularly oil, according to its Global Economic Prospects report published in June 2026. The bank warned that price volatility in commodity markets continues to weigh on the fiscal and economic stability of energy-exporting countries. The report said energy exporters have derived more than half of their government revenue on average from the commodities sector since 2002, a share that is noticeably higher than that of metal and agricultural commodity exporters. Iraq's oil-dominated economy is highly sensitive to global oil price swings, with price drops directly affecting government revenues and public spending, according to the bank. The World Bank projected Iraq's economy will contract by 2.2 percent in 2026 and by 8.9 percent in 2027. After growing 0.5 percent in 2024 and shrinking by an estimated 1.5 percent in 2025, Iraq is expected to return to growth at 12.2 percent in 2028. The bank added that Iraq's economy is among the most exposed to regional developments in the region, and that its growth forecast remains lower than that of several other Middle East oil producers.