Sweden will phase out development aid to Iraq over the coming year, the government said on Wednesday, as it focuses on giving more effective support to fewer countries.

"Sweden has contributed both humanitarian support and development aid to Iraq for many years," Johan Forssell, Minister for International Development Cooperation and Foreign Trade, said.

"The conditions have changed and Iraq is now a middle-income country with good resources to support its own population."

The government said its current aid package to Iraq amounts to around 190 million Swedish crowns ($18 million) a year. Next year, the total will be around 100 million, with aid being phased out by June 30, the government said.

Sweden, home to around 200,000 people either born in Iraq or with an Iraqi-born parent, currently gives aid to around 100 countries and Forssell said the money was too widely spread to be effective.