Journal of Management and Economics
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TYPE
Original Research
PAGE NO.
29-33
OPEN ACCESS
SUBMITED
29 March 2025
ACCEPTED
23 April 2025
PUBLISHED
30 May 2025
VOLUME
Vol.05 Issue05 2025
COPYRIGHT
© 2025 Original content from this work may be used under the terms
of the creative commons attributes 4.0 License.
Measuring the Impact of
Revenues on the GDP
Growth Rate in Iraq for
The Period 2004-2022
Bassam Mailk Sarhan
Imam AL-Kadum College (IKC), Iraq
Abstract:
Exploring the actual impact of public revenues
on the gross domestic product (GDP) is one of the most
important topics in the economic context. As a result of
the extensive studies and research that have addressed
the general budget and its components, as well as public
spending and its distribution and disbursement
mechanisms, this research constitutes a unique
research study that addresses the importance of the
actual impact of the development of public revenues
and the actual impact they have on the performance of
the GDP. Given that the Iraqi economy is a single-rent
economy in terms of collecting public revenues, the
researcher emphasized the importance of identifying
the growth of revenues supporting the oil sector, given
that most local economic activities suffer from
structural distortions. Based on this, the research
hypothesis was based on the importance of supporting
the GDP with other revenues, despite the significant
growth rates it has recorded, as demonstrated by the
researcher in the research results. Therefore, the
researcher recommends adopting modern mechanisms
to diversify public revenues in the Iraqi economy.
Keywords: -
public revenues - gross domestic product -
impact measurement.
Introduction:
The issue of collecting public revenues is
one of the basic pillars for the economy to take realistic
steps towards economic development that reflects
government trends. In order to understand the
mechanisms through which these revenues are dealt
with, which sometimes face many problems, many of
which are internal, represented by the failure to
approve the general budget or the delay in its approval
by Parliament, in addition to the insufficiency of these
revenues to meet the actual needs of public spending
and government direction. However, it is noted that
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Journal of Management and Economics
these revenues have contributed significantly to
strengthening the gross domestic product, despite
their heavy reliance on oil revenues, which
constituted, throughout the study period, up to 90% of
the size of the gross domestic product. This matter
constitutes an important issue represented by
studying the structure of public revenues and the
importance of introducing modern mechanisms to
diversify sources of income for the Iraqi economy. In
addition, there are external variables with large
dimensions that influence the performance of the
revenue side of the general budget, represented by
political variables, as well as wars and crises that
indirectly affect the growth of public revenues. On this
basis, the researcher decided to delve into this vital
field.
Significance of the Research
The research is based on the historical importance of
revenue collection and income sources for the
economy. This importance brings many benefits, as it
clarifies the types and types of revenues, their
collection methods, and the mechanisms for directing
them by economic planners.
Research Objective
The research aims to measure the importance of public
revenues and their impact on the growth rate of the
gross domestic product (GDP) in the Iraqi economy, as
well as the fluctuations affecting these revenues, the
types of revenues, and the factors affecting them.
Research Problem
The research problem lies in the fact that most
previous economic studies focused specifically on
clarifying the aspects of general government spending
and the role the government plays in directing these
expenditures, without addressing the importance of
public revenues, their types, and the methods of their
collection.
Research Hypothesis
The research is based on the hypothesis that GDP
growth is closely linked to the growth of public
revenues, in addition to its link to the growth of these
types of revenues.
Chapter One: The development of public revenues in
Iraq
Evolution of Public Revenues:
The structure of public revenues shows the
proportions of funding sources contributing to the
general budget and the relative importance of each
source. However, these contribution ratios and their
importance vary from one country to another
depending on the level of economic development. The
nature of the revenue structure and the proportions of
each one’s impact on providing revenues to the general
budget in Iraq can be clarified. Table (1) shows that
public revenues increased in 2005 to 40,502,890 million
dinars compared to 2004, with an annual growth rate of
22.80%, while the percentage of public revenues from
the gross domestic product decreased from 61.95% in
2004 to 55.08% in 2005. The reason for this is the
increase in the gross domestic product at a higher rate
than the increase in public revenues. These increases in
public revenues continued at positive growth rates,
especially in 2008, which achieved 80,252,182 million
dinars, due to the increase in oil revenues. Until 2009, it
achieved a decrease in public revenues to 55,209,353
million dinars compared to 2008, with a negative growth
rate of -31.20%, while the percentage of public revenues
from the gross domestic product decreased to 42.25%
compared to 2008. (2008) as it reached (51.10%) and
the reason for that was the global financial crisis during
that period. In 2010, public revenues rose again to
70,178,223 million dinars due to the return of crude oil
prices to rise to $75.61 per barrel, while the percentage
of public revenues from the gross domestic product rose
to 43.30% of what it was in 2009. These increases
continued until 2013, which saw a decline in public
revenues to 113,840,076 million dinars compared to
2012, which amounted to 119,817,224 million dinars,
with a negative growth rate of -4.98%. Meanwhile, the
percentage of public revenues from the gross domestic
product decreased to 41.61% compared to 2012, which
amounted to 47.13%. The reason for this was the
decline in oil revenues during that period, while public
revenues decreased in 2014 to 105,364,301 million
dinars, with a negative growth rate of -7.44%, which led
to a decline in the percentage of public revenues. Of the
GDP to (39.54%), this is attributed to a decrease in crude
oil prices to almost half until it reached less than (40)
dollars per barrel in the year (2016), in which public
revenues amounted to (54,839,219) million dinars, with
a negative growth rate of %). (See Table 7, and Figure
14). As for the year (2017), public revenues rose again
to (77,422,173) million dinars due to the return of crude
oil prices to rise to (49.3) dollars per barrel, while the
percentage of public revenues from the GDP increased
The total increased to (34.88%) of what it was in (2016),
and these increases continued until (2019). The table
below shows that in the year (2020) there was a
decrease in public revenues to (63,199,689) million
dinars compared to the year (2019), which amounted to
(107,566,995) million dinars, with a negative growth
rate of (-40.24%), while the percentage of public
revenues to the GDP decreased to (31.79%) compared
to the year (2019), which amounted to (40.91%). This
decrease is attributed to the decline in oil revenues by
(-45.12%) as a result of the decline in global demand for
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Journal of Management and Economics
oil due to the Corona pandemic and the decline in
global oil prices, in addition to Iraq’s commitment to
reduce production according to OPEC+ decisions, as oil
revenues constitute the largest proportion of total
revenues, with its contribution amounting to (86.15%)
and an amount of (54,448,514) million dinars, in
addition to the decrease in capital revenues, transfer
revenues, other revenues, commodity taxes and
production fees, and fees (Annual Economic Report,
2022
Table No. 1: Development of public revenues and gross domestic product in Iraq for the period 2004-2022
year
Public revenues
growth rate
%
GDP
at
current
prices
Public revenue as a
percentage of GDP
%
2004
32982729
-
53235358
61.95
2005
40502890
22.80
73533589
55.08
2006
49055545
21.11
95587954
51.31
2007
80252182
11.30
11455813
48.98
2008
55209352
46.89
157026061
51.10
2009
70178323
-31.20
130642187
42.25
2010
108807392
27.11
162064565
43.30
2011
119817224
55.04
217327107
50.06
2012
113840076
10.11
254225490
47.13
2013
105364301
-4.98
273587529
41.61
2014
66470253
-7.44
266420384
39.54
2015
54839219
-36.91
194680971
34.14
2016
77422173
-17.49
196924141
27.62
2017
106569834
41.18
2216657095
34.88
2018
107566990
37.64
2689118874
39.62
2019
107566995
0.93
262917150
40.91
2020
63199689
-40.24
19877432504
31.79
2021
877155765
2.11
201154366110
43.77
2022
943231877
2.81
209965432890
46.18
Source: Columns (3,1) based on data from the Central Bank of Iraq, Directorate of Statistics and Research,
statistical bulletins for the years (2004-2020).
- Columns (4,2) based on the researcher's work
Figure 1 shows the public revenue curve
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Journal of Management and Economics
Section Two: Measuring the impact of public revenues on the growth rate of the gross domestic product.
Standardization tests and the autocorrelation problem of the GDP growth rate regression model
Test of normality (the problem of heteroscedasticity)
Test name
Its value
( Sig
)
Statistical decision
Kolmogorov- Smirnov
0.119
0.200
H
0
Testing the autocorrelation problem
Test name
Its value
Dl
Du
Statistical decision
DW
2301.5
1.158
1.381
no self-correlation
Based on the results of Table (1), it is noted that the
response variable Y2 (GDP growth rate) is normally
distributed and therefore there is no problem of
heterogeneity of variance, as well as the absence of the
problems of autocorrelation and multicollinearity. This
means proceeding with the regression analysis using the
ordinary least squares (OLS) method to estimate the
parameters of the regression model for the variable Y2.
The variance analysis table for the regression model for
the variable Y2 was obtained as follows
Results of statistical analysis of the regression model for the variable
ANOVA
Analysis of variance table for Y2 after conducting statistical tests for the regression model
problems for the variable
Model
Sum
of
Squares
Df
Mean Square F
Sig.
R
2
1
Regression
1.715
1
1.715
3.118
0.098
b
0.172
Residual
8.249
15
0.550
Total
9.963
16
a. Dependent Variable: GDP growth rate
b. Predictors: (Constant), Public revenues
Source:
Prepared by the researcher based on the results of the SPSS program.
It is noted from Table (3) according to the statistical
analysis that there is a significant effect relationship
between the variable X2 (revenues) and the response
variable Y2 (GDP growth rate). The value of (Sig =
0.010) for the F test was smaller than the value of
(0.05) with a coefficient of determination of (17.2%),
which explains the changes in the response variable,
and the remaining (82.8%) is explained by random
error and indicates other factors that were not
included in the model. In light of the t-
test for the β_1
parameter for the Y2 regression model, the estimated
equation is adopted as it is significant, and thus the
estimated equation proven in the table above is
adopted to predict the GDP growth rate. From the
above results, the economic analysis shows that the
impact of public revenues in Iraq for the period (2004-
2022) is directly related to the growth rate of the gross
domestic product, as the variable (X2) represents public
revenues, as it is noted that its marginal slope
coefficient showed a positive sign, meaning that the
relationship between the rate of public revenues and
the growth rate of the gross domestic product is a direct
relationship, meaning that whenever public revenues
increase by one unit, the growth rate of the gross
domestic product increases by (0.894), which is
consistent with the economic theory.
CONCLUSIONS
1-The Iraqi economy is suffering from real difficulties, as
a result of successive years of wars and sanctions
imposed on it, as well as the problems that have
emerged in the human resource base necessary to
operate an effective economic system.
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2-The experience of implementing economic reform
steps in Iraq has proven their ineffectiveness, as they
were initiated by externally imposed environments
and frameworks, represented by the United States and
international financial and monetary organizations.
3-Economic reform steps in Iraq emerged from the
ruins of an economically shattered state, due to the
economic blockade and US occupation following 2003.
This led to the waste of time, effort, and money in
areas unrelated to economic reform, with tens of
billions of dollars being spent on military requirements.
4-There is a close relationship between the stability of
foreign exchange rates (the dollar) against the local
currency in the market and over long periods, with the
exception of some times of crisis, such as the
emergence of terrorist groups (ISIS) and the health
crisis represented by the emergence of the
Coronavirus, which disrupted the global economy.
5-Monetary policy in Iraq has faced many obstacles
that have contributed to its obstruction, including the
increase in the money supply, high inflation rates, a
deficit in the balance of payments, and external debt.
6-The Iraqi economy has suffered from political,
economic, and social conditions, such as wars,
inflation, and unemployment.
7-A significant impact of a number of structural
reforms on economic growth has been demonstrated,
including trade openness reforms, labor market
reforms, and stimulating innovation and finance.
8-A significant impact of macroeconomic reforms on
economic growth has been demonstrated, with an
inverse relationship; the lower a country's ranking in
the macroeconomic environment pillar of the Global
Competitiveness Index, the higher its growth levels.
Recommendations:
1- Resorting to state involvement alongside market
mechanisms would create a sense of balance within
the economy, as the Iraqi economy cannot rely on a
single mechanism at present.
2-Increasing job opportunities and mitigating the
recession that plagues countries experiencing crises.
3-The renter nature of the Iraqi economy, which relies
primarily on revenues from the oil extraction industry,
creates an imbalance that will persist for several years
as long as the country's economic structure remains in
its current unbalanced form. Therefore, the
importance of advancing economic reforms is
highlighted.
4-Adopting well-thought-out development approaches
with a comprehensive national character to enable
Iraq to transition from the economic system prevalent
under the former regime to a market economy through
an economic model appropriate to the nature of the
Iraqi economy.
5-The Iraqi economy remains a one-sided economy
dependent on oil revenues by 95%. Therefore, the
government is today called upon to expand support for
other economic sectors, such as agriculture, industry,
and tourism, through government support for these
sectors.
6-The country continues to suffer from state
dominance, which has led to a general loss of control.
7-The Central Bank should continue its monetary
measures that contribute, first, to controlling the
foreign exchange market and, second, regulating the
performance of local banking institutions to increase
confidence in these institutions.
8-Address the imbalances Iraq is suffering from, such as
inflation, unemployment, poverty, and others.
9-The Monetary Authority should provide a periodic
economic database presented in accordance with
international methodologies, and cooperate with
relevant institutions.
REFERENCES
Ministry of Finance, Economic Department, General
Budget Tables: Current Revenues and Expenditures for
the Period (1997-2003).
Ministry of Finance, Budget Department, Baghdad,
2002, p. 11
Ministry of Finance, Current Budget Expenditures by
Quarter (1996-2000), Republic of Iraq, Economic
Department.
Ministry of Finance, Current Budget Expenditures by
Quarter (1996-2002), Republic of Iraq, Economic
Department.
Wassan Ihsan Abdul-Moneim, The Iraqi Economy
(Reality, Problems, and Solutions), Baghdad: Political
Issues Magazine, Issue 16, 2009.
Yahya Saleh Mohsen, Economic Reform Policies in the
Republic of Yemen (Economic Results and Social
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