Iraq - Impact of Conflict and Falling Oil Prices

Despite a stall in ISIS’ advance following targeted airstrikes by the coalition forces supporting the government, the conflict seems far from over. The violence has triggered a humanitarian tragedy, with more than 2.1 million internally displaced people and countless casualties among the civilian population. The insurgency is heavily affecting the non-oil economy through the destruction of infrastructure and assets, trade disruptions, impeded access to fuel and electricity, and deterioration of investor confidence. These negative effects drove the IMF’s revision of GDP growth in Iraq in 2014 from over 6% in the spring, before the beginning of the insurgency, down to a contraction of about 0.5% – despite a better than expected performance of the oil sector, which expanded even in this difficult situation. Read More