The impact of the Turkish economic crisis on the Iraqi economy

Abstract

Iraqi-Turkish relations are witnessing a qualitative leap at the level of political and economic relations, due to the economic intertwining between the two countries, as Iraq for years occupies advanced ranks in the volume of imports from Turkey and thus it represents an indicator that is distinguished from other indicators as it reflects the impact of the economic crisis facing Turkey must be transmitted to the Iraqi economy and as a result of this intertwining of economic relations, it was necessary to study these relations to find out the extent to which Iraq was affected by the Turkish economic crisis, and accordingly the research started from the hypothesis that the Turkish crisis will affect some of the Iraqi macroeconomic variables, and the research concluded: The crisis affects the Iraqi Central Bank’s policy and this is clear through the effect on the window of selling foreign currency, as the standard results showed that the decrease in the Turkish lira exchange rate led to an increase in Iraq's imports from Turkey and then increased the demand for foreign currency, and then included in a number of recommendations, the most important of which is, Iraq must adopt commercial policies, which reduces its exposure to its trading partners, especially Turkey, and improves its trade balance towards them by taking advantage of lower prices of their currencies to enhance its imports of investment goods that would enhance its national production, thereby reducing its imports.