Analyzing the Dynamics of the Capital and Financial Accounts in Iraq's Balance of Payments: Trends and Challenges Amid Economic Shocks (2004–2023)

Abstract

The study problem lies in the structural dependency of Iraq's Capital and Financial Accounts on external shocks, coupled with a diminished capacity to attract sustainable investments outside the oil sector. This study aims to analyze the development of these accounts for the period (2004–2023), employing a descriptive-analytical approach based on data from the Central Bank of Iraq and the International Monetary Fund. The study concludes that the Iraqi Financial Account is characterized by a "rentier pattern" that reflects the economy's vulnerability to global price fluctuations, alongside an almost total absence of investments in non-extractive assets. The study recommends the necessity of diversifying capital flows and developing legal frameworks to attract Foreign Direct Investment (FDI) into non-oil sectors.