WB: Iraq's Economy to Contract Due to OPEC+ Commitments

The World Bank projects Iraq's economy will shrink by 0.9 percent in 2025, marking a downgrade of 2.3 percentage points from the April forecast. The contraction is mainly attributed to reductions in oil output as Iraq adjusts production to align with OPEC+ commitments. However, economic growth is expected to rebound strongly to 5.1 percent in 2026-2027, supported by the gradual lifting of output restrictions.

The Bank's MENAAP Economic Update (October 2025) highlights that Iraq has achieved a notable reduction in poverty since 2012, but challenges persist in labour market inclusion-particularly for women. Only 11 percent of Iraqi women aged 15 and older participate in the labour force, one of the lowest rates in the region.

Survey data collected by the World Bank show that family responsibilities remain the primary barrier to women's employment, cited by 73 percent of firms. Restrictive legislation (61 percent) and limited female applicants (60 percent) were also noted. A majority of mothers (57 percent) report being unable to work because of family obligations.

While 88 percent of Iraqis express support for women working, this drops to 67 percent if childcare by others is required, and only 34 percent view such arrangements as socially acceptable when children are left with relatives.

On the business environment, Iraqi firms continue to cite political instability, corruption, and bureaucratic obstacles as major constraints. Within the World Bank's BREADY framework, Iraq ranked in the bottom quintile globally for regulatory quality, public services, and operational efficiency. The report also notes that childcare obligations imposed on employers act as a disincentive to hiring women with young children, reinforcing traditional gender roles.