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Publication•September 20, 2021
Overview on the Expenditure of the Iraqi Household
#ICT Iraq#Human Resources#Capacity Building
September 20, 2021mujahed
This research provides an overview of Iraqi household expenditure and wellbeing. It discusses living standards, comparing Iraqi spending patterns to other MENA countries across various categories like food, rent, and medical services. The research also examines the poverty line in Iraq and regionally, aiming to aid policymakers in reducing poverty and improving Iraqi quality of life. It highlights significant expenditure shifts over time.
Publication Overview
September 20, 2021
This research provides an overview of Iraqi household expenditure and wellbeing. It discusses living standards, comparing Iraqi spending patterns to other MENA countries across various categories like food, rent, and medical services. The research also examines the poverty line in Iraq and regionally, aiming to aid policymakers in reducing poverty and improving Iraqi quality of life. It highlights significant expenditure shifts over time.
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Executive Summary
This report provides an in-depth analysis of living standards and household expenditure patterns in Iraq, comparing them with neighboring MENA countries and examining the country's poverty landscape. Its purpose is to assist policymakers in reviewing strategies to reduce poverty and enhance the quality of life for Iraqi individuals.
This report provides an in-depth analysis of living standards and household expenditure patterns in Iraq, comparing them with neighboring MENA countries and examining the country's poverty landscape. Its purpose is to assist policymakers in reviewing strategies to reduce poverty and enhance the quality of life for Iraqi individuals.
A household is defined as people living together and sharing a dwelling, and household expenditure is the money spent on goods and services over a period. Poverty is assessed through absolute poverty, meaning households cannot meet basic survival needs. Data is primarily drawn from Iraq Household Socio-Economic Surveys (IHSES) conducted by the Central Statistical Organization (COSIT) in 2006/2007, 2011/2012, and 2017/2018. The Cost of Basic Needs (CBN) approach determines the absolute poverty line.
Iraqi Household Expenditure Patterns
- Overall Spending: The average nominal household expenditure in Iraq increased by 14.7% between 2007 and 2011. This rise was primarily driven by housing, water, and fuel, followed by food, health, and clothing.
- Food: Iraqis currently spend approximately 35% of their income on food (approx. 82,000 IQD/month), a decrease from a peak of 60% in 1993 during the Gulf War. Iraqi and Egyptian households spend over 30% of their budget on food, among the highest in the MENA region.
- Rent and Housing: This category has significantly decreased from a peak of 40% in 2007 to around 5% (60,000 IQD/month) in 2018. Rent and housing are notably costly across the MENA region, being the highest expenditure category for Saudi (23.5%) and Turkish (24.3%) households.
- Medical Services: Expenditure on medical services is at its peak, consuming 6.5% of total income. A significant issue is the lack of universal healthcare and insurance in Iraq, leading to out-of-pocket expenses, unlike in Jordan where insurance is common.
- Transport and Communication: This expenditure has increased significantly since 2003, reaching 15.3% of individual income.
- Clothing and Footwear: Expenditure reached 25% of total income in 2018 (approx. 60,000 IQD/month), a substantial increase from previous steady rates. Iraqis spend more in this category than their Middle Eastern counterparts.
- Recreation and Culture: Iraqi households allocate a relatively small portion of their income to recreation and culture, at barely 2.95%, significantly lower than in Turkey (9.75%), Saudi Arabia (8.1%), Jordan (6.2%), and Egypt (4.6%).
Poverty in Iraq and the MENA Region
- Poverty Lines: In 2018, the national poverty line in Iraq was 110,881 IQD/person/month.
- Poverty Rates: In 2017/2018, the poverty headcount in Iraq was 20%, with near-poverty at 25.8%. Northern and southern governorates, particularly Al Muthanna (>54%), Al Qadisiyah (44.8%), Dhi-Qar (43%), Missan (36.5%), and Nineveh (37%), suffer from significantly high poverty rates. Poverty in the Kurdistan Region of Iraq (KRI) increased from 3.5% to 12% due to large waves of internal displacement.
- COVID-19 Impact: The pandemic is expected to worsen poverty, with an estimated 4 million people in the near-poverty category likely to transition into poverty.
Initiatives to Improvement
The Iraqi government has implemented several initiatives to improve household wellbeing and reduce poverty:
- Poverty Reduction Strategy (2018): A four-year strategy focused on fostering self-sufficiency through job creation, human capacity building, and strengthening education and healthcare, supported by a social safety net, including projects like modern villages.
- IDP Integration: Efforts are being made to integrate 1.224 million internally displaced people (IDPs) by helping them rebuild homes and communities.
- Public Distribution System (PDS) Reform: Solutions are being developed to improve the outdated PDS, including replacing it with cash transfers or an electronic voucher system to increase efficiency.
- COVID-19 Response: The government provided a 30,000 IQD subsidy to impoverished households via e-payment services. The lack of universal healthcare in Iraq continues to be a major challenge, forcing out-of-pocket expenses.
The report concludes that consistent and continuous reporting of household expenditures and poverty lines is critical for developing effective policies. It recommends that the government support the private sector, potentially through an emergency fund, and leverage ICT-enabled services for aid distribution. Furthermore, startups are encouraged to analyse expenditure patterns to identify market opportunities and develop cost-effective solutions for Iraqi households.
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Publication Details
Author:mujahed
Published:September 20, 2021
Category:report
Documents:1 PDF
Tags:3
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