Key Economic Trends and Developments
The sale of crude oil is expected to generate more than 98% of the GOI’s total export earnings and provide 89% of total government income in 2011. The GOI received a post-2003 record of $20.11billion in oil export receipts this quarter—$3.81 billion more than last quarter and 31% ahead of quarterly receipts anticipated in 2011 budget projections. Non-oil-sector economic activity also has shown signs of growth, with several multi-billion-dollarinfrastructure projects either launched or ready to launch.One mid-year analysis concluded foreign commercial activity was up sharply during the first half of 2011.With major spending now underway to rebuild the country, Iraq’s current account balance is likely to be in deficit for 2011.
Core inflation rose slightly this quarter, crossing 6% for the first time since 2009 to reach 6.3 % in May.The increase reflects pressure from rising global commodity prices. Although now more than twice the 3% rate of a year ago, inflation is below the regional average of 10.9% and is expected to remain in the 6% range through 2012. Two other key indicators, the Iraqi dinar-U.S. dollar exchange rate and the Central Bank of Iraq (CBI) policy rate, were unchanged during the quarter.