Iraq: Facing a triple-whammy – Standard Chartered

Economists at Standard Chartered Bank expect 2020 GDP to contract by 7.5% (2.1% growth prior) on revival of OPEC++, non-oil weakness. USD/IQD is trading at 1190.00.

Key quotes

“We now expect Iraq’s GDP to contract by 7.5% in 2020, versus our previous expectation of 2.1% growth. Our downgrade reflects both the revival of the OPEC++ agreement and a deeper non-oil sector recession given pandemic-related disruptions, as well as social unrest.” 

“We raise our fiscal and current account deficit forecasts to 13% and 11% of GDP (10% and 8% prior), respectively, to account for the OPEC++ agreement.”

“Iraq may face difficulties weathering lower oil prices for a prolonged period without external support, which means it could return to the IMF, although this will likely be possible only after a new government is formed.”