A boy walks on a boat lying on the dried-up bed of a section of Iraq's receding southern marshes of Chibayish in Dhi Qar province, on June 28, 2022. ASAAD NIAZI / AFP
A boy walks on a boat lying on the dried-up bed of a section of Iraq's receding southern marshes of Chibayish in Dhi Qar province, on June 28, 2022. ASAAD NIAZI / AFP
Iraq, a top oil exporter battered by climate change impact, must diversify its economy and pursue a “greener growth model,” the World Bank said Tuesday.
In a new report presented to authorities in Baghdad, the Washington-based institution said $233 billion must be invested by 2040 to allow Iraq to embark “on a green growth path,” equivalent to 6% of the country’s annual GDP.
The United Nations ranks Iraq as one of the world’s five countries most exposed to impacts of climate change.
Decades of wars and instability have affected its infrastructure and economy, which remain heavily dependent on oil, and accounts for 90 percent of government revenue.
The World Bank stated that the Country Climate and Development Report (CCDR) provides an analytical basis to address the country’s most urgent impacts of climate change all at once.
It also reviews the cost of the country's low-carbon transition and discusses opportunities and reforms aimed at adopting a greener growth model.
World Bank regional vice president for the Middle East and North Africa Ferid Belhaj told AFP that Iraq is facing three major challenges, namely water shortages, desertification and air pollution.
However, he affirmed that the country has enough financial resources to manage these challenges.
“The question is how to ensure that these financial resources are made available for new policies to tackle environmental challenges, and how to do it in an efficient way,” he said.
“Iraq faces the challenge of moving away from total oil dependence towards a more diversified, private sector-led economy that creates jobs and builds human capital while building resilience to climate change,” Belhaj noted.
The report presents a set of reforms and recommendations that Iraq can undertake in the medium term (within five to 10 years) and others in the long term, which could not be implemented until after 2030.
These include eliminating the wasteful practice of gas flaring, where natural gas in wells is burned off before oil is extracted.
It also recommended that Iraq upgrade dams and irrigation systems and “decarbonize industry, agriculture and the waste sectors.”
As for the medium and long term, it called on Iraq to reduce the dependence of the industrial, agricultural and waste sectors on carbon, improve water distribution and wastewater reuse, as well as increase reliance on smart agriculture to address impacts of climate change.
Bank of England's Breeden: Cost-cutting by Firms Helping Central Bankhttps://english.aawsat.com/business/5329842-bank-englands-breeden-cost-cutting-firms-helping-central-bank
FILE PHOTO: Deputy Governor for Financial Stability, Sarah Breeden during the Bank of England financial stability report press conference, at the Bank of England, London. Picture date: Tuesday July 7, 2026. Doug Peters/Pool via REUTERS/File Photo
Bank of England's Breeden: Cost-cutting by Firms Helping Central Bank
FILE PHOTO: Deputy Governor for Financial Stability, Sarah Breeden during the Bank of England financial stability report press conference, at the Bank of England, London. Picture date: Tuesday July 7, 2026. Doug Peters/Pool via REUTERS/File Photo
Bank of England Deputy Governor Sarah Breeden said on Thursday that cost-cutting by UK companies in response to the energy price shock caused by the Iran war would make it easier for the central bank to contain inflation.
"What's really different now, relative to when we had the last energy shock in 2022, is that people aren't looking to push costs through," Breeden said in an interview with CNBC television.
"There's a desire to absorb the shock rather than just pass it on, which makes our job as monetary policymakers a bit easier in these uncertain times,” Reuters quoted her as saying
The comments about cost-cutting by companies echoed those made by BoE Governor Andrew Bailey earlier this week.
Breeden has voted with the majority of the Monetary Policy Committee to keep borrowing costs on hold since the start of the Iran war but said in September that she might change her stance if the energy price shock feeds through into broader inflation.
Investors are pricing a quarter-point rate hike by the BoE next month as a near certainty.
Breeden, in Bangkok for the semi-annual International Monetary Fund meetings, also told CNBC she hoped wages would not rise sharply as they did in 2022 after Russia's full-scale invasion of Ukraine due to weakness in the labor market now.
Earlier on Thursday, BoE Chief Economist Huw Pill said a rate hike by the central bank should not be interpreted by investors as the start of a long series of increases.
IMF Expects Middle East Economies to Rebound to 6.6% Growth in 2027https://english.aawsat.com/business/5329826-imf-expects-middle-east-economies-rebound-66-growth-2027
Jihad Azour, Director of the Middle East and Central Asia Department at the International Monetary Fund (IMF) attends a press conference at the IMF/World Bank 2026 Spring Meetings in Washington, D.C., US, April 16, 2026. REUTERS/Elizabeth Frantz
IMF Expects Middle East Economies to Rebound to 6.6% Growth in 2027
Jihad Azour, Director of the Middle East and Central Asia Department at the International Monetary Fund (IMF) attends a press conference at the IMF/World Bank 2026 Spring Meetings in Washington, D.C., US, April 16, 2026. REUTERS/Elizabeth Frantz
The International Monetary Fund expects the economies of the Middle East, North Africa and Pakistan to rebound to growth of 6.6 percent in 2027, following a projected contraction of 1.3 percent this year, amid the economic fallout from the regional war and disruptions to energy production and trade, which have affected countries across the region to varying degrees.
Jihad Azour, the IMF's director for the Middle East and Central Asia, said economies directly affected by the conflict are facing severe pressures, while other economies in the region, along with most countries in the Caucasus and Central Asia, have shown greater resilience.
He explained that the path of the recovery will depend largely on how quickly energy production and trade return to normal and on countries’ ability to maintain macroeconomic stability.
The forecasts come after the economies of the Middle East, North Africa and Pakistan grew by 3.3 percent in 2025, illustrating the scale of the shock expected this year before a strong rebound next year.
Azour stressed, however, that the overall projections mask significant disparities among the region’s economies and that the recovery will not be uniform across countries.
Oil Exporters and Importers
Azour said oil-exporting countries directly affected by disruptions to energy production and trade will experience a marked contraction in 2026, although higher oil prices will provide some support to their fiscal and external positions.
A gradual recovery in production and trade is expected to drive a strong rebound in GDP growth in 2027, although output levels will remain below the trajectory projected before the outbreak of the conflict.
By contrast, economic activity in the region’s oil-importing countries has remained relatively resilient during 2026 and is expected to continue doing so. Workers’ remittances, tourism revenues, favorable financial conditions and government support have helped cushion the immediate impact of the shock, although the policy space available to governments is narrowing.
The IMF expects inflation in these economies to rise moderately in 2026 before gradually easing thereafter.
The Chinese-flagged container shipping vessel Hui Fa transits the Gulf of Oman on October 13, 2026. (Photo by AFP)
Lower Inventories, Greater Risks
Azour noted that the impact of the energy shock has been less severe than initial estimates suggested, thanks to surpluses accumulated before the war, production by non-Gulf countries, alternative transportation routes, adjustments in demand and drawdowns from inventories.
He cautioned, however, that these factors have provided time for adjustment but are not sustainable resources. Available inventories have declined and spare production capacity has narrowed, leaving markets more vulnerable to larger price increases should disruptions recur.
Azour identified a prolonged war as the most significant risk to the outlook, warning that further disruptions to energy production, shipping routes or critical infrastructure would weaken economic activity among Gulf oil exporters, increase inflationary pressures and exacerbate fiscal and external strains across the region.
He also warned that tighter global financial conditions could weaken demand, raise borrowing costs and increase pressure on currencies, particularly in economies with substantial sovereign debt-financing needs or a heavy reliance on external financing.
Low-income and fragile economies remain the most vulnerable to these risks because of their dependence on food imports and limited fiscal space, at a time when official development assistance is also declining.
Call for Targeted Support and Rebuilding Fiscal Buffers
Azour urged policymakers to prioritize price stability and fiscal sustainability, using monetary policy as the first line of defense when inflationary pressures emerge, complemented by prudent fiscal policy, particularly in countries with limited financial resources.
He stressed the importance of rebuilding fiscal buffers to withstand future shocks by strengthening domestic revenues, improving spending efficiency and developing stronger fiscal frameworks. He cautioned against broad-based subsidies, favoring instead temporary and targeted cash assistance for the groups most affected, helping keep the cost of intervention within budgetary limits.
Over the longer term, Azour emphasized the importance of strong institutions, credible monetary frameworks and central bank independence, alongside greater trade diversification, deeper regional integration and a stronger capacity to adopt new technologies, including artificial intelligence, to boost productivity and support growth.
Azour noted that the IMF has approved approximately $48 billion in financing for countries in the region since 2020. During fiscal year 2026, it also carried out around 437 technical assistance and capacity-building projects in 31 countries.
The IMF is scheduled to release its full regional report in Dubai on October 22, providing a more detailed assessment of economic developments and policy priorities.
Gold Rebounds from One-week Low as Dollar Slipshttps://english.aawsat.com/business/5329812-gold-rebounds-one-week-low-dollar-slips
Gold bracelets and necklaces on display for sale at a gold shop in Istanbul's Grand Bazaar (AFP)
Gold prices climbed 1% on Thursday, rebounding from a one-week low hit in the previous session as the US dollar eased, while investors assessed the likelihood of a Federal Reserve interest rate increase this month after a hot inflation report.
Spot gold rose 1% to $4,146.74 per ounce by 0501 GMT, after hitting its lowest since October 7 on Wednesday. US gold futures for December delivery gained 1.5% to $4,167.30.
The dollar slipped after scaling an 18-month peak overnight. A softer dollar makes greenback-priced bullion more affordable for buyers overseas.
"What we're seeing here is just the symptoms of a market uncertain about US interest rate policy, and that is resulting in a bit of volatility," said Kyle Rodda, senior financial market analyst at Capital.com.
"We're coming up to a really critical level for gold, which is just below the $4,000 level. If we see, again, some really strong data, then there's a view that the Fed will have to hike relatively urgently, then that will be the level of focus."
US consumer prices accelerated in September as the cost of gasoline surged. Traders are pricing in about a 29% chance of a rate hike later this month, compared with 22% before the data, according to CME's FedWatch Tool.
San Francisco Fed President Mary Daly said the US central bank will probably need to increase short-term interest rates further, though she signaled no need for a hike at the October 27-28 meeting. Vice Chair for Supervision Michelle Bowman said there's time to wait and see before any more action.
Although gold is viewed as an inflation hedge, higher interest rates reduce its appeal because it does not pay interest.
Market focus now turns to the Producer Price Index (PPI) and retail sales data due at 1230 GMT.
Among other metals, spot silver gained 0.7% to $56.01, platinum rose 1% to $1,608.20 and palladium climbed 1.3% to $1,108.14.
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