2025, Vol. 5, Issue 2, Part A

This study examines the main economic determinants of inflation in Iraq during the period 1992-2021, a period characterized by political instability, international sanctions, wars, and economic transformation. Iraq witnessed significant fluctuations in inflation rates due to internal structural vulnerabilities and external shocks. The research seeks to conduct an empirical assessment of the relationship between inflation and various macroeconomic variables, including GDP, unemployment rate, imports, exports, and agricultural investment. Using annual data and applying quantitative analytical methods such as multiple linear regression and the VAR approach, the study found that inflation in Iraq is a structurally driven phenomenon, influenced by a combination of domestic supply constraints and external dependencies. The results reveal a statistically significant positive relationship between GDP and inflation, indicating that economic growth in Iraq during the study period was not accompanied by real improvements in productivity. Conversely, unemployment was found to have an inverse relationship with inflation, consistent with the Phillips curve hypothesis.

Furthermore, imports were found to have a significant inflationary effect, while exports did not yield a statistically significant impact, highlighting the weakness of Iraq's non-oil export base. However, agricultural investment showed a substantial inverse effect on inflation, underscoring the role of food production in curbing inflationary pressures.

The study concludes that effective inflation management in Iraq requires coordinated monetary and fiscal policies, support for domestic production, particularly in agriculture, and diversification of the export base. The findings provide important insights for policymakers aiming to stabilize the macroeconomic environment.