Inflation in Iraq

A short history of inflation in Iraq

The Shortages (2006 to 2007)

This series begins in 2009, which is to say it begins after the worst. Iraqi inflation reached somewhere above 50% in 2006 on the IMF's reckoning, driven by violence that interrupted the movement of goods, by shortages of fuel in a country holding some of the world's largest reserves of it, and by a currency nobody wished to hold.

The Central Bank of Iraq raised its policy rate to 20% in two steps around the turn of 2007 and let the dinar appreciate, and inflation fell steeply through that year as violence receded and the shortages eased. By the time this record opens the rate was in single figures, and its highest reading since is the 8.7% of April 2012.

Post-Covid Inflation (2021 to 2023)

In Iraq, prices rose fastest in November 2021, at 8.4%. The causes of the post-Covid inflation were global in nature, beginning with the lockdowns: factories and ports closed and the shipping between them fell out of sequence, so goods took longer to make and longer to arrive. Governments had spent heavily supporting household incomes through those closures, so when restrictions lifted there was money waiting to be spent and not enough on the shelves to spend it on. Then in February 2022 Russia invaded Ukraine, disrupting two of the world's largest suppliers of wheat, fertiliser, oil and gas at once, and the cost of everything grown, heated or transported rose with them.

Because the causes were shared, so was the timing: most countries peaked within a few months of one another in late 2022. The major inflation events covers this episode and the others in more detail.