The United Nations Development Program (UNDP) issued Wednesday a new report on Iraq's economic recovery from the COVID-19 pandemic, recommending the country to develop the non-oil private sector.
A report by the UN Assistance Mission for Iraq said that UNDP's report set out a number of policy recommendations that respond to challenges while ensuring continued progress towards the sustainable development goals.
"While Iraq's macroeconomic and fiscal conditions were broadly positive in the last few years, two major shocks have disrupted this progress including the oil crisis and the COVID-19 pandemic," UNDP's Resident Representative in Iraq Zeina Ali Ahmad said.
The report said that Iraq's gross domestic product (GDP) is expected to reduce by nearly 10 percent in 2020, and the fiscal deficit is forecasted to reach the unprecedented level of nearly 30 percent of GDP this year, according to the report.
It recommended that the Iraqi government rapidly identify additional financing options, avoid an unplanned monetary adjustment, and improve the quality and targeting of public expenditure.
The government should also support the non-oil private sector's economy to grow and reduce dependency on oil, while continuing to provide employment for a large number of the most vulnerable and low-income households by extending social assistance programs, the report added.
Iraq is facing a severe economic hardship as more than 90 percent of its economy depends on revenues from selling crude oil, while the oil prices have plummeted amid the global recession due to the coronavirus pandemic.