Publication: Iraq Economic Monitor, Spring 2021: Seizing the Opportunity for Reforms and Managing Volatility
Loading...
Published
2021-05
ISSN
Date
2021-06-01
Author(s)
Editor(s)
Abstract
Recognizing the severity of the crisis, the GoI devised a national reform plan (the white paper) that sets out a old blueprint of structural reforms to achieve sustainable medium-term growth through economic diversification and boosting private sector growth and private sector job creation. The GoI has also devised an implementation and governance framework for the white paper in which it proposed a detailed reform matrix and launched a High Reform Council headed by the Prime Minister to accompany the implementation. Actions have already been realized starting with the reforms adopted in the 2021 budget law and other areas including in the business environment and the financial sector. The ultimate success of the reforms though depends on the political will and public support to implement the proposed measures and lead the country out of a long-standing fragility trap. Iraq's economic outlook hinges on global oil markets prospects, the implementation of the white paper reforms, and on the evolution of COVID-19 (coronavirus). The economy is forecast to gradually recover on the back of rising oil prices and rising OPEC+ production quotas. GDP is projected to grow by 1.9 percent in 2021 and 6.3 percent on average over the subsequent two years (Table 1). Non-oil GDP is forecast to recover in 2021, growing by 5.5 percent before converging to historically low potential growth trend in 2022–23. The currency devaluation is estimated to push inflation to 8.5 percent in 2021 due to limited capacity for import substitution. This will present an additional pressure on Iraqi households' wellbeing. The fiscal stance remains expansionary with only limited reform measures being included in the 2021 budget law after an extended deliberation in the Parliament. Higher oil revenues in tandem with the devaluation effect on those receipts are projected to narrow the fiscal deficit to 5.4 percent of GDP in 2021. Financing needs are forecast to remain elevated compared to pre-COVID-19 levels, averaging at 13.7 billion Dollars per year (7.5 percent of GDP) in the outlook period (2021–2023). The 2021 approved budget includes limited reforms such as new consumption taxes and better targeting of PDS transfers which are in line with the GoI white paper. If implemented they could help moderate the fiscal deficit and exchange rate pressures. However, more structural issues such as public wages and pension rigidities remain unaddressed.
Link to Data Set
Citation
“World Bank. 2021. Iraq Economic Monitor, Spring 2021: Seizing the Opportunity for Reforms and Managing Volatility. © World Bank. http://hdl.handle.net/10986/35625 License: CC BY 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Algeria Economic Monitor, Spring 2021(World Bank, Washington, DC, 2021-03-31)This Algeria Economic Monitor provides an update on key recent economic developments and policies. It places them in a longer-term and global context and assesses the implications these developments and changes in policies have on the outlook for Algeria. This Monitor’s coverageranges from the macro-economy to financial markets to indicators of human welfare and development. It is intended for a wide audience, including policy makers, business leaders, financial market participants, and the community of analysts and professionals engaged in Algeria. The report is divided into four chapters. Chapter 1 presents the country’s macroeconomic developments in 2020 and early 2021. Chapter 2 presents the short- to medium-term outlook for the Algerian economy. Chapter 3 details the impact of the COVID-19 pandemic on inequality in Algeria based on evidence across the Middle East and North African (MENA) region. Finally, Chapter 4 looks at the key challenges in the country’s health sector as the COVID-19 pandemic eases. The cut-off date for data and forecasting is June 11, 2021.Publication Jordan Economic Monitor, June 2020(World Bank, Washington, DC, 2020-06)The COVID-19 pandemic has created a severe global recession. The global economy, after showing a moderate recovery in 2019, is currently reeling from the Coronavirus (COVID-19) pandemic which, besides taking a toll on human life, has pushed the global economy into the worst recession since the Great Depression due to the lockdowns aimed at controlling the spread of the virus. Starting as a supply shock, the pandemic has triggered an unprecedented demand shock that led to significant decline in global commodity prices, especially oil prices. The lockdowns have also amplified pre-existing vulnerabilities such as weak governance, large labor market informality, and limited fiscal space. This constrained fiscal space, for example, limits countries'room to maneuver with already high levels of debt and tightening external financing conditions. The recent global developments along with domestic disruptions due to pandemic measures are severely impacting the already struggling Jordanian economy and its prospects. For the fourth year in a row, in 2019 Jordan's economy continued to drift around a tepid 2.0 percent growth rate. Such a growth rate is not sufficient to tackle some pressing socio-economic issues, such as a low labor force participation and high unemployment, particularly among women and youth. On the macro front, while there was significant reduction recorded in external imbalances during 2019, supported by healthy growth in exports and travel receipts, fiscal policy remained expansionary and pushed the debt-to-GDP ratio to almost 100 percent. Within this context, the country is facing significant economic challenges due to the COVID-19 pandemic through both external and domestic channels. These challenges are amplified because Jordan has large linkages to the external world.Publication Jordan Economic Monitor, Spring 2021(World Bank, Washington, DC, 2021-06-23)Despite recent progress on vaccine developments to combat the COVID-19 (coronavirus) pandemic, the global economic recovery remains surrounded by high uncertainty. During the first half of 2020, global economic output declined by an unprecedented level, resulting in a sharp fall in global trade. The latest estimates from the IMF WEO in April 2021 indicate that the global economy contracted by 3.3 percent in 2020. This contraction is substantially deeper than one observed during the Global Financial Crisis of 2007 - 08. However, recent trends are pointing toward a strong recovery for global economic activity in the second half of 2021 supported by substantial fiscal and monetary stimuli. Nevertheless, the extent of the protraction is closely linked to vaccine rollout, which is gaining critical mass in some developed economies, but remains uneven across the world. Indeed, the World Bank is projecting global economy to grow by 4 percent in 2021. Nevertheless, this global outlook retains an important country-specific component which depends on the adjustment capacity of each economy as well as the effectiveness of its policy to minimize permanent scarring to the economy as well as pace and scale of domestic vaccine rollout.Publication Iran Economic Monitor, Spring 2020(World Bank, Washington, DC, 2020-06-21)The recession in Iran accelerated in 2019-20 as United States (U.S.) sanctions further tightened. Inflation has gradually declined as the impact of the sharp depreciation of the rial in 2018-19 dissipated but foreign exchange reserves remain limited. The growing gross borrowing needs has increased the government’s reliance on debt issuance and withdrawals from strategic reserves. Negative economic growth and high inflation coupled with COVID-19 (Coronavirus) will put further pressure on household livelihoods in 2020-21. The current unique situation of Iran’s economy presents significant downside risks for the baseline macroeconomic outlook. The country’s economic and social challenges disproportionately impact the lower income decile households who have faced significant economic pressure. Any increase in the value of cash transfers, along with introducing targeting mechanisms, can help the poor cope with the social-economic shocks, but fiscal constraints may limit the scope for significant response.Publication Indonesia Economic Prospects, June 2021(World Bank, Washington, DC, 2021-06-16)COVID-19 (coronavirus) has taken a heavy economic and human toll globally and in Indonesia. According to official statistics, over 3.8 million people have died from COVID as of May 2021. The global economy experienced one of the most severe recessions, shrinking by 3.5 percent in 2020 compared to 1.7 percent in 2009 during the global financial crisis. The recession in Indonesia (-2.1 percent) was milder than among Emerging Markets and Developing Economies, EMDEs (-4.3 percent excluding China). Small and medium-sized firms and businesses in contact-intensive services sectors were severely affected. About 1.8 million Indonesians became unemployed between February 2020 and 2021 and another 3.2 million people exited the labour force. Three hundred thousand fewer youth entered the labour market. About 2.8 million people have fallen into poverty as of September 2020 with the government’s social assistance program mitigating a potentially worse outcome. Indonesia's recovery has been relatively gradual until the first quarter of 2021 but has accelerated more recently. Indonesia’s recovery gap – the difference between real GDP and its pre-crisis trend – narrowed from -7.5 to -7.1 percent between Q2 and Q4 2020. By comparison, the average 'recovery gap' among regional and G20 peers shrank from -13.6 to -5.1 percent. The recovery gap remained elevated at -7.9 percent during the first quarter this year. Consumption and investment growth have been subdued due to the still weak labor market and high uncertainty while trade has recovered more strongly. The recovery gap in contact-intensive services sectors, such as transport and accommodation, has also been elevated compared to manufacturing industries due to social distancing and stronger external demand in manufacturing. But retail sales increased by 11 percent between March and April while the manufacturing continued to expand suggesting a stronger rebound during the second quarter.
Users also downloaded
Showing related downloaded files
Publication Indonesia Economic Prospects, June 2025(Washington, DC: World Bank, 2025-06-23)Indonesia’s economy remains resilient amid worsening global conditions. GDP grew at 4.9 percent year-on-year (yoy) in Q1-2025, slightly lower than previous post-pandemic quarters. Domestic demand was impacted by reduced government consumption and lower investment. Budget efficiency measures led to a contraction in public consumption, while investment in the construction and manufacturing sectors dipped due to investors’ concerns over domestic and global policy uncertainty. Meanwhile, declining commodity prices worsened Indonesia’s terms of trade. The supply side showed notable contributions from the agriculture and services sectors. Businesses and households are adjusting to economic uncertainty, but weak consumption of middle-class households has been persistent since the pandemic. The GOI structural reform agenda could accelerate growth further. In response to rising global policy uncertainty, the GOI devised a program of deregulation including reforms to the business environment and licensing, investment liberalization, trade and logistics reforms, and digital services. These reforms complement other reforms currently in play, like those related to financial sector deepening, and accompany the demand stimulus that the GOI is targeting through its priority programs. If implemented, these reforms could gradually expand the economy’s capacity, unlock further FDI, boost investment returns, and ensure productivity gains. The report suggests that this will translate into better job creation and raise GDP growth to 5.3-5.5 percent in 2026-2027. This report identifies the necessary steps to reach the target of providing 3 million housing units each year. In short, to meet the housing target and supercharge current efforts, the government needs to act as both a housing provider and a housing facilitator: instituting housing regulation reforms, accelerating public-funded housing programs, and creating an enabling environment that attracts private investment in Indonesia. Directly, 3.8 billion dollars in annual public investments can create an estimated 2.3 million jobs and mobilize 2.8 billion dollars in private capital. Reforms can create an enabling environment for housing investments and indirectly help multiply this impact.Publication Economy Profile of Bhutan(World Bank, Washington, DC, 2017-11-01)Doing Business 2018 is the 15th in a series of annual reports investigating the regulations that enhance business activity and those that constrain it. This economy profile presents the Doing Business indicators for Bhutan. Doing Business presents quantitative indicators on business regulation and the protection of property rights that can be compared across 190 economies; for 2018 Bhutan ranks 75. Doing Business measures aspects of regulation affecting 11 areas of the life of a business. Ten of these areas are included in this year’s ranking on the ease of doing business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation, which is not included in this year’s ranking. Data in Doing Business 2018 are current as of June 1, 2017. The indicators are used to analyze economic outcomes and identify what reforms of business regulation have worked, where and why.Publication Human Resources for Mental Health Service Delivery in Viet Nam(Washington, DC: World Bank, 2024-05-30)"Human Resources for Mental Health Service Delivery in Viet Nam" provides an overview of the country’s current state of and challenges to mental health service delivery. The framework of the report is composed of four interconnected domains: health care, social services, education and mental health literacy, and informal care systems. The organizational structure, significant achievements, critical gaps, and problems in mental health service delivery at the institutional and community levels are highlighted in terms of public demand, availability, accessibility, and quality of service. The report uses new empirical data from surveys, workshops, and group discussions with key stakeholders. It describes the mental health workforce in Viet Nam and analyzes critical issues, including the shortage of professionals (psychiatrists, mental health nurses, psychologists, psychotherapists, social workers, occupational therapists, and others). Given the need to develop all levels of mental health care, the report addresses the uneven distribution of the provision of service between levels of health care institutions and rural and urban regions, competency mismatches, job satisfaction, recruitment, and challenges to the retention of mental health workers. The report also examines the need for mental health education and training at the institutional and structured program levels, as well as the supply constraints to the future development of the mental health workforce. The interdisciplinary team of authors emphasizes the urgent need for Viet Nam to strengthen its human resources for mental health service delivery toward achieving universal health coverage, including all mental disorders. The report’s evidence-based recommendations include multisectoral workforce planning; transformation of education and training; coordination, integration, and retention of the available workforce; improvement of the workforce governance framework; and strengthened mental health financing.Publication Digital Africa(Washington, DC: World Bank, 2023-03-13)All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.Publication World Development Report 1993(New York: Oxford University Press, 1993)This is the sixteenth in the annual series and examines the interplay between human health, health policy and economic development. Because good health increases the economic productivity of individuals and the economic growth rate of countries, investing in health is one means of accelerating development. More important, good health is a goal in itself. During the past forty years life expectancy in the developing world has risen and child mortality has decreased, sometimes dramatically. But progress is only one side of the picture. The toll from childhood and tropical diseases remains high even as new problems - including AIDS and the diseases of aging populations - appear on the scene. And all countries are struggling with the problems of controlling health expenditures and making health care accessible to the broad population. This report examines the controversial questions surrounding health care and health policy. Its findings are based in large part on innovative research, including estimation of the global burden of disease and the cost-effectiveness of interventions. These assessments can help in setting priorities for health spending. The report advocates a threefold approach to health policy for governments in developing countries and in the formerly socialist countries. First, to foster an economic environment that will enable households to improve their own health. Policies for economic growth that ensure income gains for the poor are essential. So, too, is expanded investment in schooling, particulary for girls. Second, redirect government spending away from specialized care and toward such low-cost and highly effective activities such as immunization, programs to combat micronutrient deficiencies, and control and treatment of infectious diseases. By adopting the packages of public health measures and essential clinical care dsecribed in the report, developing countries could reduce their burden of disease by 25 percent. Third, encourage greater diversity and competition in the provision of health services by decentralizing government services, promoting competitive procurement practices, fostering greater involvement by nongovernmental and other private organizations, and regulating insurance markets. These reforms could translate into longer, healthier, and more productive lives for people around the world, and especially for the more than 1 billion poor. As in previous editions, this report includes the World Development Indicators, which give comprehensive, current data on social and economic development in more than 200 countries and territories.