The Impact of Global Oil Price Volatility on Government Expenditure and Economic Growth in Iraq: A Statistical-Analytical Study for the Period 2004–2024

• اياد عبد السيد عنين الفضلي

  جامعة واسط/كلية التربية للعلوم الصرفة

  Author

This study analyzes the relationship between fluctuations in global oil prices and the variables of government spending and economic growth in Iraq during the period from 2004 to 2024, using an annual time series consisting of 21 observations drawn from the databases of the International Monetary Fund, the World Bank, the U.S. Energy Information Administration, and OPEC. The study employed multiple statistical tools, including Pearson’s and Spearman’s correlation coefficients, simple linear regression models, economic elasticity analysis, and lag correlation. The results revealed a strong and statistically significant correlation between oil prices and the budget balance (r = 0.737, p < 0.001), a moderate correlation with government spending (r = 0.430, p < 0.05), while its correlation with overall economic growth was weak and non-significant (r = -0.062, p = 0.788), suggesting that the transmission mechanisms of oil prices to growth operate through the public spending channel rather than directly through the oil production channel. Furthermore, elasticity analysis showed that every 1% increase in the oil price is associated with a 45% improvement in the budget balance, revealing unprecedented structural fragility in Iraq’s public finances. The study recommends adopting a strict fiscal rule linked to the reference oil price, establishing a sovereign wealth fund to absorb oil surpluses, and accelerating economic diversification to reduce rentier dependency

1. اياد عبد السيد عنين الفضلي, جامعة واسط/كلية التربية للعلوم الصرفة

   اسم الباحث : م.م.اياد عبد السيد عنين الفضلي

   جامعة واسط/كلية التربية للعلوم الصرفة

   [email protected]

   السكن :واسط –كوت –حي الزهراء (اقرب نقطة دالة ثانوية الزهراء للبنات)

   رقم الهاتف :07715076239

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