Islamic State (IS) will lose control of Mosul, its capital in Iraq, over the coming year, but will remain a threat to the country by going underground and carrying out terror attacks. Iraq will maintain formal unity within a fragile federalised state over the coming decade, with the Kurdish region retaining significant autonomy but not outright independence.
Economic growth will turn positive again in 2017 in Iraq, after three years of recession . No boom is on the horizon, however, given that major structural impediments remain.
Sectarian tensions will remain elevated even with the defeat of IS. Sunni grievances could turn violent again if Baghdad fails to reconstruct the Sunni territory it re-conquers from IS.
PM Haider al-Abadi could lose his party's support, resulting in his impeachment. This would further increase political instability, with political parties attempting to gain more power.
|e/f = BMI estimate/forecast. Source: National Sources, BMI|
|Nominal GDP, USDbn||225.4||176.8||165.6||194.1|
|Real GDP growth, % y-o-y||-3.9||-2.7||-3.9||2.3|
|Consumer price inflation, % y-o-y, eop||1.6||2.3||7.0||5.5|
|Exchange rate IQD/USD, eop||1,166.00||1,182.00||1,182.00||1,182.00|
|Budget balance, % of GDP||-5.3||-13.8||-15.0||-6.7|
|Current account balance, % of GDP||7.3||-1.1||-4.6||-1.9|
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