Iraq’s next government will inherit the task of reforming and revving up growth for an economy facing persistent challenges, from weak crude prices and poor infrastructure to fallout from a tense standoff between the United States and Iran. 

First, however, the oil rich country’s competing political factions must choose a leader. Following Nov. 11 parliamentary elections, Iraq has entered a familiar state of political limbo after Prime Minister Mohammed Shia al-Sudani’s coalition won the most seats, as expected, but fell well short of the majority needed to guarantee his second term leading OPEC’s second largest producer. 

Negotiations over coalition-building could take months, leaving Baghdad in a holding pattern at a moment when economic reforms, diversification and fiscal adjustments are needed for an economy overwhelmingly dependent on oil export revenues. 

Sudani, in office since late 2022, this year pitched himself on the campaign trail as the remedy to Iraq’s woes, pledging reforms and promising to cut the budget deficit, expand non-oil revenue and steer young Iraqis toward private sector jobs. He did so as he also pursued major deals with American energy giants, moves aimed at securing both investment and better ties with Washington.