Iraq IRQ

Executive summary

Iraq's central bank maintains an adequate credibility score of 67.7/100, but faces a significant credibility gap of 99.6/100, driven largely by geopolitical instability. Recent armed conflicts, consulate attacks, and regional tensions have sharply increased risks, with the geopolitical score at 37.4/100. The absence of clear policy rate data and communication from the central bank limits transparency. While inflation remains low at 1.5%, the lack of a formal inflation target and ongoing regional volatility pose challenges to macroeconomic stability. Institutional investors should closely monitor the escalation of tensions, particularly around the Kuwaiti consulate in Basra and cross-border military movements, as these could disrupt economic and policy outcomes. The region's average composite score of 68.5 highlights Iraq's slightly below-average position, underscoring the need for improved central bank governance and communication to restore confidence.

Peer context

Rank 3/9 in Middle East & North Africa · 78th percentile

Region avg 50.4 · best 67.3 · worst 24.8