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Purpose: The purpose of the research is to analyze fluctuations in global oil prices and identify the factors that control them. The study aims to clarify the nature and characteristics of the international oil market, as well as the relationship between oil, public expenditure, and the economy in rentier countries. The research seeks to provide in...
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... Specifically, rising oil prices have a negative impact on economic growth in the region. This finding aligns with previous studies that highlight the adverse effects of global oil price volatility on economic performance (Asmara et al., 2016b); (Ito, 2012); (Bondzie et al., 2014); (Rasheed, 2023); and (Maji & Danjuma, 2023). Specifically, oil price volatility can lead to fiscal deficits and government revenue instability, resulting in inefficient public expenditure and hampering the effectiveness of fiscal policies in driving economic growth (Rasheed, 2023). ...
... This finding aligns with previous studies that highlight the adverse effects of global oil price volatility on economic performance (Asmara et al., 2016b); (Ito, 2012); (Bondzie et al., 2014); (Rasheed, 2023); and (Maji & Danjuma, 2023). Specifically, oil price volatility can lead to fiscal deficits and government revenue instability, resulting in inefficient public expenditure and hampering the effectiveness of fiscal policies in driving economic growth (Rasheed, 2023). Additionally, as production costs increase, oil price volatility exacerbates inflation and impedes investment, ultimately reducing gross domestic product (GDP) growth (Almasria et al., 2024). ...
The trade cycle and monetary policy paved the way for asymmetry in the behavior of oil prices. On the support, it can increase the rate that does not cause inflation and inflation of any requested policy stimulus. We use the Panel Vector Autoregressive (PVAR) model to analyze price dynamics on economic movements in annual data for 2008-2023 in four ASEAN countries. Our results show an asymmetry between oil prices and economic growth, as indicated by the PVAR and IRF test values. Our policy recommendations for these countries need to be carried out to reduce dependence on oil as a factor of production.
... These can be explained by the no-economic expense of government which does not contribute to economic growth. In this regard, Rasheed, S. A. (2023) note that "Rentier economies face challenges in diversifying and reducing their dependence on oil exports. Adherence to budgets and developing transparent and flexible principles is crucial for real economic growth in rentier economies" ...
Foreign direct investment is a tool to finance economic growth as it allows capital injection, job creation, and technology transfer. The objective of this paper is to investigate the effects of foreign direct investment on economic growth in Iraq during the period of 1997-2021 using the Generalized Method of Moments (GMM) regression method. This research provides an update on the influence of FDI on economic growth using both linear and non-linear relationships. Our investigation has yielded evidence of co-integration relationships with the presence of structural breaks, even though correlations between the different variables in the model remain low or medium-level. We conclude that the relationship between economic growth and foreign investment is nonlinear and hump-shaped. Our results suggest adopting more incentives for FDI in Iraq and the implementation of renewable energy sources.
In 2009, the oil and gas sector in Iraq witnessed a critical turning point with the implementation of licensing contracts, which encouraged unprecedented foreign investment in the sector. This resulted in rapid economic growth and noticeable improvement. Consequently, the federal government and the Kurdistan Regional Government sought to increase oil and gas production, which impacted revenue flows for companies and the state. Despite , serious environmental and social challenges emerged due to the increased production, such as climate change, resource depletion, and environmental degradation. As an important party in this transformative progress, the Kurdistan Region plays a vital role in shaping the future of the country's sustainable development. Aware of these challenges and the legislative shortcomings in Iraq, this research aims to identify the key challenges and provide a comprehensive understanding of sustainable development strategies in the oil and gas sector, with the goal of exploring effective solutions to mitigate these challenges and facilitate informed decision-making and the implementation of appropriate strategies. Keywords: Sustainable development, investment, oil and gas sector, sustainability challenges.
This study aims to examine the relationship between crude oil prices, population, exports, inflation, and economic growth in Iraq based on annual time series from 1997 to 2022. As it is well known, crude oil is one of the most important resources for energy production, transportation, and various industries. Moreover, this energy source has a critical importance in terms of the international trade. Therefore, the effects of crude oil in Iraq's economy is analyzed in this study. To achieve the degree and magnitude of the parameters used in the models, the Ordinary Least Squares method and the Johansen cointegration test are utilized. According to the empirical results of the study, while crude oil prices, population, and exports have a positive impact on economic growth, inflation has a negative impact. Additionally, a long-term relationship is found between crude oil prices, population, exports, inflation, and economic growth.as a result of cointegration test with the VAR system. Based on these results, it can be said that sustainable oil producing is very crucial in Iraq. Since the government income of Iraq relies heavily on revenue generated from oil exports, the improving and regulation activities should be considered in the oil sector. On the other hand, as the oil is finite resource, the local policymakers need to focus on researching alternative sources for exports and research the ways to boost the country's GDP.
This study evaluates the impact of monetary policy reforms on Iraq's economic stability from 2001 to
2023. Through a comprehensive analysis of inflation rates, GDP growth, and unemployment rates
against the backdrop of monetary policy changes, the research identifies significant correlations and
causations. It also explores the role of the Central Bank of Iraq in navigating the country through various
economic challenges, highlighting the effectiveness of policy tools. The findings underscore the critical
need for continued reforms in monetary policy to foster sustainable economic growth and stability,
suggesting directions for future policymaking.
Based on a VAR framework, Granger Causality Tests, Impulse Response Function and Variance Decomposition analysis on the annual data from 1970 to 2021. This study aims to demonstrate the effect of oil price fluctuations on GDP, imports, international reserves, and exports in Iraq. The Granger causality results demonstrated a unidirectional connection moving from oil price to imports, exports, international reserves, and GDP, this is an inevitable result because oil prices are determined in the international markets according to specific factors that do not include local economic variables. The variance decomposition result indicated that oil price changes are an important source of variation in the studied variables. Finally, the results of the impulse response function indicated that fluctuations in oil prices significantly impact GDP, exports, imports, and international reserves in Iraq. Therefore, we suggest that economic policymakers work seriously to develop practical plans to diversify the Iraqi economy instead of relying too heavily on oil revenues, which are characterized by sharp and continuous volatility, to avoid the negative effects of these fluctuations on the main macroeconomic variables in Iraq.
