Iraq is set to become the fourth largest economy in the Arab world by 2030, according to a fresh report from the International Monetary Fund released on October 28, 2025. This projection highlights the country’s strong oil sector and ongoing rebuilding efforts, positioning it behind Saudi Arabia, the United Arab Emirates, and Egypt in gross domestic product terms.
Key GDP Projections for Arab Economies
The IMF report outlines expected GDP figures for leading Arab nations by 2030. These numbers show a clear picture of economic power shifts in the region.
Here is a table summarizing the top ten projected GDPs:
| Rank | Country | Projected GDP (in billions USD) |
|---|---|---|
| 1 | Saudi Arabia | 1,600 |
| 2 | United Arab Emirates | 764.8 |
| 3 | Egypt | 589.8 |
| 4 | Iraq | 345.9 |
| 5 | Algeria | 309 |
| 6 | Qatar | 296.8 |
| 7 | Morocco | 241.9 |
| 8 | Kuwait | 190.1 |
| 9 | Oman | 133.3 |
| 10 | Jordan | 73.6 |
Saudi Arabia leads with a massive 1.6 trillion dollars, driven by its oil exports and diversification plans. Iraq’s spot at fourth comes from steady growth in energy production and infrastructure projects.
These figures come from the IMF’s latest World Economic Outlook, which factors in current trends like oil prices and global demand. Experts note that while oil remains key, countries like Iraq are pushing for broader economic bases.
Factors Boosting Iraq’s Economic Rise
Iraq’s economy has faced challenges from past conflicts and sanctions, but recent developments point to a brighter future. The oil sector dominates, making up most of the nation’s revenue.
Key drivers include:
- Strong oil production, with Iraq holding some of the world’s largest reserves.
- Reconstruction efforts after years of instability, funded by international aid and domestic investment.
- Growth in non-oil areas like construction and services, though still limited.
In 2025, the IMF upgraded Iraq’s growth forecast to 0.5 percent for the year, up from an earlier dip. This reflects better oil output and controlled inflation. By 2030, the economy could reach 690 billion dollars in purchasing power parity terms, ranking it fifth in the Arab world overall.
Analysts say diversification away from oil is crucial. Iraq has started projects in renewable energy and tourism to reduce risks from oil price swings. Recent events, like the reactivation of stalled infrastructure projects worth 12 billion dollars in May 2025, show momentum.
The nation also benefits from its young population and strategic location. However, issues like corruption and political tensions could slow progress if not addressed.
Comparison with Regional Peers
Iraq’s projected growth stands out when compared to neighbors. Egypt, in third place, relies on tourism and manufacturing, with expected GDP of 589.8 billion dollars by 2030.
Saudi Arabia and the UAE lead due to massive investments in tech and green energy. Algeria, right behind Iraq, focuses on natural gas exports.
Qatar and Kuwait, though smaller in population, punch above their weight with energy wealth. Morocco’s rise comes from agriculture and trade ties with Europe.
Iraq’s per capita GDP is projected at 5,873 dollars by 2026, placing it eighth in the Arab world. This figure highlights that while overall GDP grows, wealth distribution remains uneven, with much tied to the oil industry.
Recent IMF data from July 2025 forecasts Iraq’s economy to expand by 3.1 percent in the near term, amid global uncertainties. This positions Iraq ahead of some oil producers but behind faster diversifiers.
Challenges and Opportunities Ahead
Despite the positive outlook, Iraq faces hurdles. Dependence on oil exposes it to market volatility. The IMF warns that without reforms, growth could stall.
Opportunities lie in international partnerships. For instance, deals with global firms for gas exports and digital payments have surged, with transactions jumping from 2.6 trillion Iraqi dinars to 7.6 trillion in early 2025.
The report ties into broader Arab trends, where nations are investing in tech and tourism. Iraq’s government has pledged to boost non-oil sectors, aiming for sustainable development.
Experts believe achieving this ranking will require stable governance and anti-corruption measures. If successful, it could lift living standards and attract more foreign investment.
Global Context and Implications
This projection fits into worldwide economic shifts. The Arab world as a whole is expected to see varied growth, with some countries like Saudi Arabia targeting non-oil revenues.
For Iraq, reaching fourth place by 2030 would mark a recovery from decades of turmoil. It echoes the 1970s boom when oil nationalization spurred development.
Recent global events, such as fluctuating energy prices due to geopolitical tensions, underscore the need for resilience. The IMF’s June 2025 statement ranked Iraq fourth in growth among Arab oil producers for 2025, at 4.1 percent.
This could influence regional dynamics, potentially strengthening Iraq’s role in organizations like the Arab League.
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