Author(s): Esraa said Saleh, Nidal Shaker Jouda, Afeifa Bachai Showket
External economic shocks directly affect the financial variables in countries exporting primary commodities, especially oil states, and this is due to a strong correlation between the general budget and foreign trade in these countries, so fiscal policy responds in a way that is in line or counter to the direction of the economic shock, and that response is reflected on relevant macroeconomic sectors.
The economic shocks resulting from fluctuations in oil prices on the international markets greatly affect the Iraqi economy, because of its dependence on oil revenues as a major financial resource, at a time when non-oil sectors suffer from low rates of contribution to GDP, which is reflected in the decline in their ability to absorb growth Growing in the workforce.
The main conclusion reached by the research is that the expansionary fiscal policy that was associated with the positive economic shocks, represented by the high oil prices was not employed in the development of the non-oil sector, which remained almost unable to absorb the labor force, and thus unemployment remains at relatively high levels, and that the main recommendation of the research was represented by following an integrated system of economic policies that work on diversifying the Iraqi economy, and reducing dependence on oil revenues, and developing the non-oil sector to address the problem of unemployment.