Hot drinks habits hold firm as coffee gains everyday relevance

Soft drinks consumption rises as heat and bottled water reliance lift demand

Politics is fragmented, but the state is combatting corruption and fortifying relations with neighbours. Recession has blighted the economy and prices are facing deflation, but an ambitious infrastructure project could drive economic development. Population expansion and rising children’s numbers could support the consumer market, but the gender gap is huge and water scarcity is causing displacement. Data centres are a major focus, but e-commerce is struggling and 5G has yet to launch.

Consumers increasingly seek healthier alternatives

Growth of cooking ingredients and meals in Iraq in 2025 is primarily driven by urbanisation, increased consumer reliance on the market, and a market economy that encourages greater consumption despite the country’s economic challenges.

Retail value sales of consumer health are expected to rise in current terms in Iraq in 2025. This growth is being driven by rapid urbanisation, increased consumer awareness - particularly around supplements - and frequent over-prescription by healthcare professionals. These trends are ongoing and are expected to continue shaping both the market and consumer behaviour in the coming years.

Value sales of snacks in Iraq are expected to rise at a moderate rate in 2025. The snacks industry in Iraq is currently facing challenges in investment. On one hand, supply chain pressures are pushing suppliers to localise production. However, significant technical, technological, and capital constraints are hindering rapid localisation. However, there is more space for foreign investors especially those with a history in the production and marketing of snacks in Iraq as local players have limit

Baby food has reached a plateau with value and volume growth starting to slow in 2025. This slowdown is primarily being driven by slowing population growth in Iraq and a year-on-year decrease in the number of newborns. Additionally, a highly fragmented competitive landscape and a heavy focus on aggressive sales strategies have created confusion among consumers who struggle to find the brand they want while it has created instability for suppliers—raising the risk of market failure.

The report examines the economic landscape of Iraq and provides information on major monetary indicators, foreign trade and government finance. The economy expanded in real terms in 2024, driven by exports and private consumption. However, a global economic slowdown, increasing geopolitical tensions and economic fragmentation as well as tight financial conditions pose risks to the country’s economic outlook.

Total volume sales of alcoholic drinks declined in Iraq in 2024. This was the second consecutive year of decline following the imposition of a ban on the sale, import or production of alcohol in central and southern Iraq early in 2023. The ban, which was originally approved by parliament in 2016, does not apply in the Kurdistan Region of Iraq (KRI), which is governed by the Kurdistan Regional Government (KRG). Also, despite the ban, alcoholic drinks continued to be sold via official retail chann

The number of households is set to increase moderately, while the average household size will shrink in Iraq over 2024-2029. Couples with children will remain the dominant household type but the fastest household expenditure growth is forecast to be recorded by single person households. In addition, the share of households living in urban areas is projected to expand to 74.5% by 2029.

Insight into income, wealth and expenditure of consumers and households is vital in helping businesses make strategic decisions with regards to which country (or even which region within a country) to enter, which consumer segment to target, which products or services to market, and at which price point. Other factors such as the size and expansion of the middle class and income inequality are also important in helping companies gauge the potential of a country market.

Tobacco saw a return to volume growth in Iraq in 2024. Government policies and taxes are pushing the market to rely more on local production for both cigarettes and smoking tobacco. The number of factories in both categories has increased rapidly and is expected to continue growing in the coming years. There is an oversupply across all categories, leading to a drop in prices. To remain profitable, suppliers are focusing on high-volume sales, often cutting prices to gain market share. This has re

Beauty and personal care saw strong growth in retail volume terms across most categories in 2024. However, value growth remained weak due to a drop-in prices as more suppliers entered the market and the local currency strengthened compared to pre-2023 levels. Demand continues to increase across all categories of beauty and personal care as income levels and the quality of life in Iraq continue to improve.

The population of Iraq is predicted to increase by 35.1%, due to changes in net migration and natural change, standing at a total of 62.2 million citizens by 2040. The birth rate in Iraq is anticipated to fall between 2024 and 2040. By 2040, young adults (aged 18-29) will make up the largest cohort of the population. Generational cohorts in Iraq will continue to influence consumer expenditure based on their specific purchasing habits and unique demands.

Tissue and hygiene products saw a slight increase in popularity in Iraq in 2024. Consumers displayed growing interest in higher quality products that offered added value. However, price remained a key factor in purchasing decisions, with the increasing number of smaller players offering low-priced products leading to increasing fragmentation in the competitive landscapes in categories such as nappies/diapers/pants, wipes and retail tissue.

Demand rose across home care in 2024 boosted by population growth, urbanisation and long-term economic development, along with the shift towards more modern housing and the increasingly Western lifestyle habits of affluent urban dwellers. Numerous small and mid-sized local suppliers also entered the market in 2024, with a primary focus on dishwashing, bleach, surface care, and laundry care products. In regions where local suppliers are active, prices dropped, often at the expense of quality.

This report covers the retail sector in frontier markets in the Middle East and North Africa. Euromonitor International’s definition of the region includes the following countries

The commodities country overview provides comprehensive data on production, consumption and price trends on key commodities markets. The commodities overview in Iraq covers production and consumption trends in agricultural commodities, energy products, electricity as well as an overview of key economic and business environment trends.