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International Monetary Fund. Middle East and Central Asia Dept.
Domestic stability has improved since the new government took office in October 2022. This has facilitated the passage of Iraq’s first three-year budget, which entailed a large fiscal expansion starting in 2023. The non-oil economy has rebounded strongly in 2023 after stalling in 2022 and was largely unaffected by the ongoing conflict in the region. Nonetheless, Iraq remains highly vulnerable to oil price fluctuations and private sector activity is hindered by the large state footprint—including as an employer of first resort—corruption, red tape, underdeveloped infrastructure, and poor access to credit.
International Monetary Fund. Middle East and Central Asia Dept.
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