The trade volume between Turkey and Iraq and potential reflection on economics

Introduction: Over the last decade, economic exchanges between Iraq and Turkey have been analyzed with attention to the trends and patterns of trade, their impact on the economies of both countries, and the major drivers and barriers to trade. These are the research questions that will guide the study: identify trade trends, economic impacts, and factors affecting trade between the two countries. Methods: To address these questions, the study reviewed available data from the International Monetary Fund (IMF), the World Bank, the United Nations Conference on Trade and Development (UNCTAD), the World Trade Organization (WTO), and Eurostat. Historical trade data, including exports and imports of goods and services, balance of payments, foreign direct investment, and gross domestic product, were collected and analyzed. Empirical analyses were conducted using a fixed-effects panel regression model to examine the relationships between inflation rates, political stability, and GDP. More specific details came from the US Census Bureau, Bureau of Economic Analysis, and International Trade Center. Also reported on were publications by the Iraqi and Turkish governments, as well as international organizations, describing the economic context and policies. Results: The analysis showed different economic profiles for Iraq and Turkey. Its economy is considerably larger and more stable with a more diverse trade portfolio. The smaller and more volatile Iraqi economy is heavily dependent on the oil sector. iv GDP growth rates of both countries differ somewhat, with Turkey's economy being more resilient and consistent. Inflation has been more volatile in Turkey while Iraqi inflation has been relatively stable in recent years. Fiscal performance indicates that Turkey has remained on a more sustainable fiscal trajectory with smaller deficits than in Iraq's more volatile fiscal history. According to empirical analysis, political stability has a large negative impact on GDP, and inflation has a small negative interaction on GDP, indicating that, apart from institutional resilience, Iraq and Turkey are asymmetrically exposed to economic risks due to differences in institutional resilience. Fuels and mining products drive Iraq's trade, whereas machinery and transport equipment have grown in Turkey. Conclusion: Findings reveal widening economic gaps and changing trade dynamics between Iraq and Turkey. Although Turkey has a more balanced and stable economy, Iraq's economy is more heavily reliant on one sector and therefore more volatile. Key trade drivers are political stability, economic policies, and location. The study concludes that both countries have room for cooperation and growth potential, particularly in diversified trade portfolios and in addressing fiscal and inflationary challenges.