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Romania vs. Iraq

Economy

RomaniaIraq
Economy - overview

Romania, which joined the EU on 1 January 2007, began the transition from communism in 1989 with a largely obsolete industrial base and a pattern of output unsuited to the country's needs. Romania's macroeconomic gains have only recently started to spur creation of a middle class and to address Romania's widespread poverty. Corruption and red tape continue to permeate the business environment.

In the aftermath of the global financial crisis, Romania signed a $26 billion emergency assistance package from the IMF, the EU, and other international lenders, but GDP contracted until 2011. In March 2011, Romania and the IMF/EU/World Bank signed a 24-month precautionary standby agreement, worth $6.6 billion, to promote fiscal discipline, encourage progress on structural reforms, and strengthen financial sector stability; no funds were drawn. In September 2013, Romanian authorities and the IMF/EU agreed to a follow-on standby agreement, worth $5.4 billion, to continue with reforms. This agreement expired in September 2015, and no funds were drawn. Progress on structural reforms has been uneven, and the economy still is vulnerable to external shocks.

Economic growth rebounded in the 2013-17 period, driven by strong industrial exports, excellent agricultural harvests, and, more recently, expansionary fiscal policies in 2016-2017 that nearly quadrupled Bucharest’s annual fiscal deficit, from +0.8% of GDP in 2015 to -3% of GDP in 2016 and an estimated -3.4% in 2017. Industry outperformed other sectors of the economy in 2017. Exports remained an engine of economic growth, led by trade with the EU, which accounts for roughly 70% of Romania trade. Domestic demand was the major driver, due to tax cuts and large wage increases that began last year and are set to continue in 2018.

An aging population, emigration of skilled labor, significant tax evasion, insufficient health care, and an aggressive loosening of the fiscal package compromise Romania’s long-term growth and economic stability and are the economy's top vulnerabilities.

Iraq's GDP growth slowed to 1.1% in 2017, a marked decline compared to the previous two years as domestic consumption and investment fell because of civil violence and a sluggish oil market. The Iraqi Government received its third tranche of funding from its 2016 Stand-By Arrangement (SBA) with the IMF in August 2017, which is intended to stabilize its finances by encouraging improved fiscal management, needed economic reform, and expenditure reduction. Additionally, in late 2017 Iraq received more than $1.4 billion in financing from international lenders, part of which was generated by issuing a $1 billion bond for reconstruction and rehabilitation in areas liberated from ISIL. Investment and key sector diversification are crucial components to Iraq’s long-term economic development and require a strengthened business climate with enhanced legal and regulatory oversight to bolster private-sector engagement. The overall standard of living depends on global oil prices, the central government passage of major policy reforms, a stable security environment post-ISIS, and the resolution of civil discord with the Kurdish Regional Government (KRG).

Iraq's largely state-run economy is dominated by the oil sector, which provides roughly 85% of government revenue and 80% of foreign exchange earnings, and is a major determinant of the economy's fortunes. Iraq's contracts with major oil companies have the potential to further expand oil exports and revenues, but Iraq will need to make significant upgrades to its oil processing, pipeline, and export infrastructure to enable these deals to reach their economic potential.

In 2017, Iraqi oil exports from northern fields were disrupted following a KRG referendum that resulted in the Iraqi Government reasserting federal control over disputed oil fields and energy infrastructure in Kirkuk. The Iraqi government and the KRG dispute the role of federal and regional authorities in the development and export of natural resources. In 2007, the KRG passed an oil law to develop IKR oil and gas reserves independent of the federal government. The KRG has signed about 50 contracts with foreign energy companies to develop its reserves, some of which lie in territories taken by Baghdad in October 2017. The KRG is able to unilaterally export oil from the fields it retains control of through its own pipeline to Turkey, which Baghdad claims is illegal. In the absence of a national hydrocarbons law, the two sides have entered into five provisional oil- and revenue-sharing deals since 2009, all of which collapsed.

Iraq is making slow progress enacting laws and developing the institutions needed to implement economic policy, and political reforms are still needed to assuage investors' concerns regarding the uncertain business climate. The Government of Iraq is eager to attract additional foreign direct investment, but it faces a number of obstacles, including a tenuous political system and concerns about security and societal stability. Rampant corruption, outdated infrastructure, insufficient essential services, skilled labor shortages, and antiquated commercial laws stifle investment and continue to constrain growth of private, nonoil sectors. Under the Iraqi constitution, some competencies relevant to the overall investment climate are either shared by the federal government and the regions or are devolved entirely to local governments. Investment in the IKR operates within the framework of the Kurdistan Region Investment Law (Law 4 of 2006) and the Kurdistan Board of Investment, which is designed to provide incentives to help economic development in areas under the authority of the KRG.

Inflation has remained under control since 2006. However, Iraqi leaders remain hard-pressed to translate macroeconomic gains into an improved standard of living for the Iraqi populace. Unemployment remains a problem throughout the country despite a bloated public sector. Overregulation has made it difficult for Iraqi citizens and foreign investors to start new businesses. Corruption and lack of economic reforms - such as restructuring banks and developing the private sector – have inhibited the growth of the private sector.

GDP (purchasing power parity)$579.549 billion (2019 est.)

$556.442 billion (2018 est.)

$532.611 billion (2017 est.)

note: data are in 2010 dollars
$427.736 billion (2019 est.)

$409.705 billion (2018 est.)

$412.027 billion (2017 est.)

note: data are in 2010 dollars
GDP - real growth rate4.2% (2019 est.)

4.54% (2018 est.)

7.11% (2017 est.)
-2.1% (2017 est.)

13.1% (2016 est.)

2.5% (2015 est.)
GDP - per capita (PPP)$29,941 (2019 est.)

$28,576 (2018 est.)

$27,192 (2017 est.)

note: data are in 2010 dollars
$10,881 (2019 est.)

$10,660 (2018 est.)

$10,972 (2017 est.)

note: data are in 2010 dollars
GDP - composition by sectoragriculture: 4.2% (2017 est.)

industry: 33.2% (2017 est.)

services: 62.6% (2017 est.)
agriculture: 3.3% (2017 est.)

industry: 51% (2017 est.)

services: 45.8% (2017 est.)
Population below poverty line23.8% (2018 est.)23% (2014 est.)
Household income or consumption by percentage sharelowest 10%: 15.3%

highest 10%: 7.6% (2014 est.)
lowest 10%: 3.6%

highest 10%: 25.7% (2007 est.)
Inflation rate (consumer prices)3.8% (2019 est.)

4.6% (2018 est.)

1.3% (2017 est.)
-0.1% (2019 est.)

0.3% (2018 est.)

0.2% (2017 est.)
Labor force4.889 million (2020 est.)8.9 million (2010 est.)
Labor force - by occupationagriculture: 28.3%

industry: 28.9%

services: 42.8% (2014)
agriculture: 21.6%

industry: 18.7%

services: 59.8% (2008 est.)
Unemployment rate3.06% (2019 est.)

3.56% (2018 est.)
16% (2012 est.)

15% (2010 est.)
Distribution of family income - Gini index36 (2017 est.)

28.2 (2010)
29.5 (2012 est.)
Budgetrevenues: 62.14 billion (2017 est.)

expenditures: 68.13 billion (2017 est.)
revenues: 68.71 billion (2017 est.)

expenditures: 76.82 billion (2017 est.)
Industrieselectric machinery and equipment, auto assembly, textiles and footwear, light machinery, metallurgy, chemicals, food processing, petroleum refining, mining, timber, construction materialspetroleum, chemicals, textiles, leather, construction materials, food processing, fertilizer, metal fabrication/processing
Industrial production growth rate5.5% (2017 est.)0.7% (2017 est.)
Agriculture - productsmaize, wheat, milk, sunflower seed, potatoes, barley, grapes, sugar beet, rapeseed, plums/sloeswheat, barley, dates, tomatoes, rice, maize, grapes, potatoes, rice, watermelons
Exports$114.311 billion (2019 est.)

$110.685 billion (2018 est.)

$105.188 billion (2017 est.)
$61.4 billion (2017 est.)

$41.72 billion (2016 est.)
Exports - commoditiescars and vehicle parts, insulated wiring, refined petroleum, electrical control boards, seats (2019)crude petroleum, refined petroleum, gold, dates, petroleum coke (2019)
Exports - partnersGermany 22%, Italy 10%, France 7% (2019)China 26%, India 24%, South Korea 9%, United States 8%, Italy 6%, Greece 6% (2019)
Imports$136.091 billion (2019 est.)

$127.553 billion (2018 est.)

$117.292 billion (2017 est.)
$39.47 billion (2017 est.)

$19.57 billion (2016 est.)
Imports - commoditiescars and vehicle parts, crude petroleum, packaged medicines, insulated wiring, broadcasting equipment (2019)refined petroleum, broadcasting equipment, cars, jewelry, cigarettes (2019)
Imports - partnersGermany 19%, Italy 9%, Hungary 7%, Poland 6%, China 5%, France 5% (2019)United Arab Emirates 28%, Turkey 21%, China 19% (2019)
Debt - external$117.829 billion (2019 est.)

$115.803 billion (2018 est.)
$73.02 billion (31 December 2017 est.)

$64.16 billion (31 December 2016 est.)
Exchange rateslei (RON) per US dollar -

4.02835 (2020 est.)

4.31655 (2019 est.)

4.0782 (2018 est.)

4.0057 (2014 est.)

3.3492 (2013 est.)
Iraqi dinars (IQD) per US dollar -

1,184 (2017 est.)

1,182 (2016 est.)

1,182 (2015 est.)

1,167.63 (2014 est.)

1,213.72 (2013 est.)
Fiscal yearcalendar yearcalendar year
Public debt36.8% of GDP (2017 est.)

38.8% of GDP (2016 est.)

note: defined by the EU's Maastricht Treaty as consolidated general government gross debt at nominal value, outstanding at the end of the year in the following categories of government liabilities: currency and deposits, securities other than shares excluding financial derivatives, and loans; general government sector comprises the subsectors: central government, state government, local government, and social security funds
59.7% of GDP (2017 est.)

66% of GDP (2016 est.)
Reserves of foreign exchange and gold$44.43 billion (31 December 2017 est.)

$40 billion (31 December 2016 est.)
$48.88 billion (31 December 2017 est.)

$45.36 billion (31 December 2016 est.)
Current Account Balance-$11.389 billion (2019 est.)

-$10.78 billion (2018 est.)
$4.344 billion (2017 est.)

-$13.38 billion (2016 est.)
GDP (official exchange rate)$249.543 billion (2019 est.)$231.994 billion (2019 est.)
Taxes and other revenues29.3% (of GDP) (2017 est.)35.7% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)-2.8% (of GDP) (2017 est.)-4.2% (of GDP) (2017 est.)
Unemployment, youth ages 15-24total: 16.8%

male: 16.3%

female: 17.5% (2019 est.)
total: 25.6%

male: 22%

female: 63.3% (2017)
GDP - composition, by end usehousehold consumption: 70% (2017 est.)

government consumption: 7.7% (2017 est.)

investment in fixed capital: 22.6% (2017 est.)

investment in inventories: 1.9% (2017 est.)

exports of goods and services: 41.4% (2017 est.)

imports of goods and services: -43.6% (2017 est.)
household consumption: 50.4% (2013 est.)

government consumption: 22.9% (2016 est.)

investment in fixed capital: 20.6% (2016 est.)

investment in inventories: 0% (2016 est.)

exports of goods and services: 32.5% (2016 est.)

imports of goods and services: -40.9% (2016 est.)
Gross national saving18.3% of GDP (2019 est.)

18.1% of GDP (2018 est.)

20.3% of GDP (2017 est.)
13.3% of GDP (2019 est.)

20.6% of GDP (2018 est.)

18.9% of GDP (2017 est.)

Source: CIA Factbook