Shafaq News/ Recent data from the International Monetary Fund (IMF) reveals that Iraq ranks 115th in terms of per-capita purchasing power parity (PPP); a shocking figure that reflects the ongoing economic challenges the country faces despite its vast oil reserves.

Although some small and wealthy countries continue to thrive due to their financial sectors, tax regimes, or natural resources, Iraq struggles to improve its overall standard of living and address income inequality.

The IMF report indicates that in the world's 10 poorest countries, the average per-capita purchasing power is $1,380, while in the 10 richest, it is over $105,000.

Since last October, per-capita purchasing power grew by just $30 in poor countries and by more than $5,000 in high-income countries. Iraq's ranking at 115th place indicates that the nation faces significant hurdles in addressing its economic disparities.

The COVID-19 pandemic has further exacerbated existing inequalities within countries, with low-paid workers being hit hardest by lockdowns and the economic fallout. As the pandemic subsided, inflation surged globally, and the invasion of Ukraine by Russia intensified the food and oil price crisis. Lower-income families in countries like Iraq continue to bear the brunt of these challenges as they struggle to afford basic necessities such as housing, food, energy, and transportation.

The IMF warns that some of its data should be interpreted cautiously, as many nations in the ranking are tax havens, leading to artificially inflated GDPs. As tax evasion tactics become more prevalent, it is estimated that by the end of the 2020s, about 40% of global foreign direct investment flows could be attributed to such tactics, up from 30% in the 2010s. This further complicates the economic landscape for nations like Iraq, which seek to improve its wealth and overall standard of living.

Albeit Iraq is gradually emerging from a deep recession -caused by the COVID-19 pandemic and the plunge in oil prices in 2020- and the economy is projected to grow by 5.4% on average a year between 2022 and 2024, the country's macroeconomic outlook remains subject to a significant degree of risk due to high dependence on oil, budget rigidities, and delays in the formation of a new government.

Oil dependency could also hurt the domestic drive for reforms, thereby deepening structural economic challenges.