The economy in the Kurdistan Region depends on oil income, agriculture and tourism.

Because of the stability in the Kurdistan Region, economically compared to other regions in Iraq, it is more advanced, the Kurdistan Regional Government used to receive 13% of the revenues of the oil-for-food program. Food security in the Kurdistan Region led to spending most of the region's revenues on development projects. With the end of this program at the end of 2003, the regional government provided four billion dollars from the oil-for-food program's revenues without spending it.

In 2006, the first oil well was drilled after the liberation of Iraq in the Kurdistan Region, which was drilled by a Norwegian energy company under the name (DNO).

It turned out that the oil field holds stocks of 100 million barrels of oil, and in the beginning of 2007, 5,000 barrels of oil were extracted per day.

The stability of the Kurdistan Region has become a reason for economic development to move to other parts of Iraq. At the beginning of 2004, the average per capita income in the Kurdistan Region increased by 25% compared to other regions in Iraq.

There is an international airport in both Erbil and Sulaymaniyah, which connects the Kurdistan Region with the countries of the Middle East and Europe with flights.