Economic Growth in Iraq

The IMF (headquartered in Washington, D.C.) has just issued a report that blames the slow growth of the Iraqi economy on the lack of an oil law (I thought there's a really nasty war going on there too) and says that foreign investment is needed to grow the oil sector:

Iraqi growth 'unexpectedly slow'

Foreign investment is needed to grow the oil sector, the IMF says.

The Iraqi economy has not been growing as fast as expected, according to the International Monetary Fund (IMF).

It blames an expected expansion in oil production that failed to materialise.

The IMF praised the work of the Central Bank of Iraq (CBI) in bringing consumer price inflation down to 46% in June from 65% at the end of 2006.  [but compare that to inflation in the US: CPI grew by 2.4% in 2006]

The CBI has allowed the Iraqi dinar to appreciate by 15% and has raised its key interest rate twice so it currently stands at 20%.

"Despite an unsettled political situation, capacity constraints, and the deterioration in security in 2006, progress has been made in implementing structural reforms, although much remains to be done," the report says.

It calls for a new legislative framework for the oil sector to help encourage foreign investment and bring about the growth in oil production that the IMF had been expecting in 2006.