IMF calls on Iraqis to look beyond oil

March 22, 2013 at 7:15 AM

AMMAN, Jordan, March 22 (UPI) -- Iraq needs to encourage growth outside the oil sector if it's to improve the private sector and business opportunities, the International Monetary Fund said.

Carlo Sdralevich, senior IMF economist for the Middle East and Central Asia, met with Iraqi officials in Jordan to discuss economic potential in the post-war climate.

"Despite a difficult security and political environment, Iraq managed to maintain macroeconomic stability over the past two years," he said.

Violence and internal political disputes have hampered Iraq's post-war development. The IMF said the economy grew at a rate of 8 percent last year and should grow 9 percent this year. Oil production should increase from around 3 million barrels per day in 2012 to 3.3 million bpd this year.

Oil revenues account for about 95 percent of the Iraq budget.

Sdralevich said the overall economy of Iraq suffers from "severe structural weakness." Unemployment is high and the business environment is weak.

"While oil-growth is projected to remain high over the coming years, boosting non-oil private sector growth will need a long-term government strategy centered on improving the business environment and opening up opportunities for the private sector," he said in a statement.

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