The External Financial Crises and Their Role in The Economic Growth Fluctuations in Iraq During the Period (2004-2021)

Abstract

Financial crises are a concerning and essential phenomenon due to their severe and dangerous negative impact on global stability. These crises have also spread to developing and advanced countries due to their financial and economic openness. The adverse effects of financial crises have had repercussions on global oil prices, which in turn affected economic growth in Iraq, given its dependence on the oil sector. The main objective of the research was to examine the impact of the global financial crisis on economic growth in Iraq. The research utilized deductive methodology and descriptive analysis as the appropriate approach to achieve the research goal and understand the effect of global financial crises on economic growth. The research begins with the hypothesis that the economic growth in Iraq is affected by global financial crises through oil prices in international markets. The researcher utilizes specific indicators of the Iraqi economy, including oil prices, public revenues, public expenditures, and public debt, to demonstrate the impact of global financial crises on these indicators and how this impact reflects on economic growth in Iraq, represented by the gross domestic product (GDP). The research findings highlight several impacts on the Iraqi economy due to various financial crises. These include the 2009 mortgage crisis, which decreased crude oil prices in the global market due to the global economic recession.

Additionally, the financial crisis since the second half of 2014 was caused by a decline in crude oil prices due to sluggish global economic growth. Furthermore, the COVID-19 crisis at the end of 2019 had significant financial consequences, accompanied by decreased oil prices. It is evident that the Iraqi economy is directly and unexpectedly affected by financial crises through the oil markets, as the country heavily relies on oil revenues, which constitute a large proportion of the GDP.                                                            

Paper: Research paper