The government under Prime Minister Mohammed Shia’ al-Sudani maintained cohesion and avoided the political paralysis that marked previous years. Major protests remained limited, and the coalition managed to pass budgets and advance policy decisions with fewer internal obstacles.
Stable oil revenues supported economic performance, while long-standing dependence on hydrocarbons persisted. The government promoted diversification through infrastructure investment, energy sector reform and expanded trade with Gulf states and China. Currency stabilization efforts eased inflationary pressures, though non-oil investment and private sector participation remain limited.
Governance benefited from an improving security environment, with no significant resurgence of the Islamic State and only sporadic rural attacks. Regional tensions, including militia strikes on U.S. facilities, did not escalate into broader conflict. Water shortages and climate pressures remained critical challenges, prompting efforts toward regional cooperation and gradual expansion of renewable energy projects.
