Lagging oil output slows Iraq economic growth

The International Monetary Fund said economic growth in Iraq has been slower than expected as the violence-wracked country struggles to ramp up oil production above the current 2 million barrels a day.

“Economic growth has been slower than expected at the time of the last (IMF economic review) mainly because the expected expansion of oil production has not materialized,” the IMF said in its annual review of Iraq’s economy.

Iraq’s economic prospects hinged critically on an improvement in the security situation, the fund added.
The IMF estimated that Iraq’s gross domestic product growth would reach 6.3 per cent in 2007, slightly up from 6.2 per cent in 2006.

The US has added 30,000 troops to its forces in Iraq to try and stem sectarian violence, which has pushed the country to the brink of civil war.

The US hopes that the troop increase will quell the daily bloodshed in Iraq as the government tries to kick-start the economy and lure investment especially in the oil sector.

The country sits on the third largest oil reserves in the world and depends on oil sales for almost all of its foreign currency earnings. Its oil profits are key to rebuilding the country after years of international sanctions and conflict.

TradeArabia