The Future Demographic and Economic Dynamics and Their Impact on the Power of the Kurdistan Region

Abstract

Demographic characteristics constitute one of the principal determinants of the power of the Kurdistan Region, as population represents a fundamental element in activating geographical resources and directing economic and military development pathways. Demographic transformations within the region exert direct effects on its future geopolitical standing, resulting from changes in population size, age structure, and composition, along with their associated economic and security implications. Demographic projections indicate that the population of the region is expected to increase from approximately 6.51 million in 2024 to about 8.93 million in 2040, at an average annual growth rate of 2.05%. This growth, however, reflects a relative slowdown compared to previous periods, posing increasing pressures on the labor market and public services and necessitating more efficient urban and developmental planning policies.

Economically, the gross domestic product is projected to grow from approximately USD 38–40 billion in 2025 to nearly USD 55–58 billion by 2030, accompanied by an increase in per capita income from USD 5,716 to USD 7,588. This growth is driven by rising investment levels and improved performance of productive sectors, despite the persistence of constraining factors, most notably oil price volatility and political disputes. Changes in the dependency ratio further indicate a gradual improvement in the age structure of the population, with the ratio expected to decline to around 51.1% by 2040, reflecting an expansion of the working-age population and an enhancement of the regional economy’s productive capacity.

Economic indicators also highlight a growing tendency toward economic diversification in the Kurdistan Region, marked by a declining contribution of the service sector and a relative increase in the roles of the industrial and agricultural sectors, alongside a reduction in the share of the public sector and a growing contribution of the private sector. This transition signifies a gradual shift toward a more productive and less rent-dependent economic structure. Socially, the region has experienced a noticeable decline in poverty rates during the period 2007–2023, although disparities between urban and rural areas persist. In this context, the Kurdistan Region has adopted a set of strategic projects aimed at diversifying the economy and achieving sustainable development, thereby contributing to enhanced economic stability and strengthening the overall foundations of regional power.