Abstarct: Over recent decades, Iraq’s economy has faced major structural challenges despite its substantial oil resources. High dependence on oil revenues, weak non-oil sectors, limited investment capacity, economic volatility, insufficient human capital development, and high investment risk have made Iraq’s economic growth unstable and vulnerable to external shocks. The main objective of this study is to design and develop a system dynamics model to analyze the structure and dynamics of Iraq’s economic growth and to evaluate the effects of policy scenarios on non-oil production, physical capital, human capital, aggregate demand, private investment, and growth sustainability. This research is applied in terms of purpose and descxriptive–analytical in nature. The study first identifies the key variables affecting Iraq’s economic growth and then represents the causal and feedback relationships among them through causal loop diagrams and a stock–flow diagram. The model is simulated using the system dynamics approach over the period 2004–2050. The analyzed scenarios include the baxse run, an increase in government investment, an increase in educational investment, a reduction in economic volatility, and a combined policy scenario. To assess the reliability of the model, structural validation, dimensional consistency, behavioral validation, sensitivity analysis, and extreme condition tests are conducted. The results indicate that, under the baxse run, non-oil production, physical capital, and aggregate demand follow an increasing but limited path, while human capital grows slowly. The scenario comparison shows that the combined scenario, which simultaneously increases government investment and educational investment while reducing economic volatility, produces the best overall performance. Under this scenario, non-oil production reaches approximately USD 168.49 billion in 2024, compared with USD 134.28 billion in the baxse run. Moreover, physical capital increases to about USD 3,649.32 billion and human capital reaches approximately 114.60 index units by 2050. The extreme condition test also shows that reducing economic volatility eliminates negative private investment and improves the stability of investment behavior. Overall, the findings suggest that sustainable economic growth in Iraq requires an integrated policy package focused on productive public investment, human capital development, and reducing economic volatility.