Statement at the End of an IMF Mission on Iraq

[The Englishman]

Statement at the End of an IMF Mission on Iraq

March 17, 2017

End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision.

• In 2016, real GDP growth was sustained at 11% supported by a large increase in oil output that benefitted from past oil investments
• In 2017, economic activity is expected to remain muted due to a 1.5% contraction in oil production and only a tepid recovery of the non-oil sector.
• Further reforms to create fiscal space for inclusive growth, strengthen the business environment, reduce corruption and repair the banking sector are needed to support private sector-led growth and diversification of the economy

The Iraqi authorities and the staff of the International Monetary Fund (IMF) held discussions in Amman from March 5–17, 2017 on the 2017 Article IV Consultation and the second review of Iraq’s 36-month Stand-By Arrangement (SBA) approved by the IMF Executive Board on July 7, 2016 (See Press Release No. 16/321). The SBA aims to restore fiscal and external balance and to improve public financial management while protecting social spending. The first review under the SBA was completed on December 5, 2016 ( See Press Release No. 16/540).

Mr. Christian Josz, Mission Chief for Iraq, issued the following statement:

“Iraq has been hard hit by the conflict with ISIS and the plunge in global oil prices since 2014. The government has responded to the fiscal and balance of payments crisis with a large but necessary fiscal adjustment supported by financial assistance from the international community. In 2016, real GDP growth was sustained at 11 percent supported by a large increase in oil output that benefitted from past oil investments. Nevertheless, the non-oil economy experienced an 8 percent contraction due to the conflict and the fiscal consolidation. In 2017, economic activity is expected to remain muted due to a 1.5 percent contraction in oil production under the agreement reached by the Organization for Petroleum Exporting Countries, and only a tepid recovery of the non-oil sector.

“The plunge in oil prices has driven the decline of Iraq’s gross international reserves from $53.7 billion at end 2015 to the still comfortable level of $46.5 billion at the end of December, 2016. Fiscal pressures remain significant with the government deficit remaining at 12 percent of GDP in 2016, due to continuing weak oil prices and rising humanitarian and security spending. Total public debt increased from 32 to 64 percent of GDP during 2014-16. Credit growth decelerated and non-performing loans in state-owned and private banks increased significantly in 2016.

“The authorities have maintained the exchange rate peg which remains a key nominal anchor. Medium term growth prospects remain modest driven by projected flat oil production and investments in the face of the revenue constraint and modest pickup in non-oil growth supported by the expected improvement in security and implementation of structural reform. Further reforms to create fiscal space for inclusive growth, strengthen the business environment, reduce corruption and repair the banking sector are needed to support private sector-led growth and diversification of the economy once post- ISIS reconstruction is underway. Risks remain high, arising primarily from uncertainty in the oil price outlook, security and political uncertainties, and administrative weaknesses.

“The Iraqi authorities and IMF staff started discussions on the second review of the SBA. These discussions will continue during the upcoming IMF and World Bank Spring Meetings from April 21–23, 2017 in Washington, DC.

“During the visit, the team met with the Acting Minister of Finance Prof. Abdulrazzaq A. Jaleel Essa, Acting Governor of the Central Bank of Iraq (CBI), Dr. Ali Mohsen Ismail Al-Allaq, the Financial Adviser to the Prime Minister Dr. Mudher Saleh, and officials from the ministries of finance, oil, planning, the State Oil Marketing Organization, the Central Statistical Office, the Central Bank of Iraq, and representatives from the Kurdistan Regional Government, and the Board of Supreme Audit. The team would like to thank the Iraqi authorities for their cooperation and the open and productive discussions.”

IMF Communications Department

MEDIA RELATIONS

PRESS OFFICER: WAFA AMR

PHONE: +1 202 623-7100EMAIL: MEDIA@IMF.ORG

Quote

The government has been responding with a large but necessary fiscal adjustment supported by financial assistance from the international community– IMF’s Josz

 

[bostonangler]

9 minutes ago, The Englishman said:

“The authorities have maintained the exchange rate peg which remains a key nominal anchor. Medium term growth prospects remain modest driven by projected flat oil production and investments in the face of the revenue constraint and modest pickup in non-oil growth supported by the expected improvement in security and implementation of structural reform. Further reforms to create fiscal space for inclusive growth, strengthen the business environment, reduce corruption and repair the banking sector are needed to support private sector-led growth and diversification of the economy once post- ISIS reconstruction is underway. Risks remain high, arising primarily from uncertainty in the oil price outlook, security and political uncertainties, and administrative weaknesses.

Looks like we will be here a while...

 

B/A

[Boozer]

Ill wait to see how things go next week in DC

[3n1]

imo with all the rebuilding iraq needs whenever they decide to start, their currency will need to be international with a market economy ,, very few know a date or rate someone will simply get lucky if they guess it , of course if ur calling it every day you cant miss   

[Synopsis]

4 minutes ago, 3n1 said:

imo with all the rebuilding iraq needs whenever they decide to start, their currency will need to be international with a market economy ,, very few know a date or rate someone will simply get lucky if they guess it , of course if ur calling it every day you cant miss   

BINGO, 3n1!

My opinion is Iraq will need to get real busy rebuilding immediately after the ISIS crisis (no rhyme intended) is declared ended as a significant tool to avert sectarian conflicts that could erupt into regional conflicts or even Civil War. With all the international attention Iraq is receiving, I think we could be almost there! Without an internationally traded currency and full international trade access/utilization, I suspect their rebuilding effort will be significantly hampered and problematic. Iraq will need full trade channels to accomplish satisfying immediate and pressing economic development needs and avert social related negative impacts.

Just my opinion and 

Go Moola Nova!

[eburt]

3 minutes ago, Synopsis said:

BINGO, 3n1!

My opinion is Iraq will need to get real busy rebuilding immediately after the ISIS crisis (no rhyme intended) is declared ended as a significant tool to avert sectarian conflicts that could erupt into regional conflicts or even Civil War. With all the international attention Iraq is receiving, I think we could be almost there! Without an internationally traded currency and full international trade access/utilization, I suspect their rebuilding effort will be significantly hampered and problematic. Iraq will need full trade channels to accomplish satisfying immediate and pressing economic development needs and avert social related negative impacts.

Just my opinion and 

Go Moola Nova!

I like your thinking Synopsis....

[Synopsis]

2 minutes ago, eburt said:

I like your thinking Synopsis....

I like your thinking, Eburt, about what I am thinking - looks like a winner when forward looking minds agree!

Go Moola Nova!

[boosterbglee]

You guys have such good manners........

[Synopsis]

Just now, boosterbglee said:

You guys have such good manners........

Yes, Yes, by all means, BoosterBGlee! I suspect that is far better than the stinky manures some folks have and like to spread around!                

A Super Day to You, BoosterBGlee!

Go Moola Nova!

[Rmc10]

I hope 2017 is the year. ♡♡♡

[tigergorzow]

DV,  Don't worry be happy........Let's just wait until "Liberation Of Mosul" is done and I do believe everything will fall in place meaning important laws, etc.   Stay positive and watch the plan come together and we all will receive our blessings.  Iraq cannot continue to drag this out because it is in their best interest to return to the World Stage with an international recognized currency and 1182 is not going to cut it IMHO..... 

Always Keeping The Faith!!

GO RV / RI

[blueskyline]

1 hour ago, bostonangler said:

Looks like we will be here a while...

 

B/A

The authorities ((((have )))))maintained the exchange rate peg which remains a key nominal anchor.........I'm ever the optimist. That "have maintained " is until now . I look to see what happens next . (March 21st)

[blueskyline]

1 hour ago, bostonangler said:

Looks like we will be here a while...

 

B/A

The authorities ((((have )))))maintained the exchange rate peg which remains a key nominal anchor.........I'm ever the optimist. That "have maintained " is until now . I look to see what happens next . (March 21st)

[MyLadiesDaddy]

22 minutes ago, tigergorzow said:

DV,  Don't worry be happy........Let's just wait until "Liberation Of Mosul" is done and I do believe everything will fall in place meaning important laws, etc.   Stay positive and watch the plan come together and we all will receive our blessings.  Iraq cannot continue to drag this out because it is in their best interest to return to the World Stage with an international recognized currency and 1182 is not going to cut it IMHO..... 

Always Keeping The Faith!!

GO RV / RI

You picked The next one 

[ChuckFinley]

Just checked out who was on here. Some Power Playes NYK and LGD. 

[CaptainBVI]

Great to watch the power of positive thinking crew at work.

Thanks for all your efforts.

[new york kevin]

I imagine  credit growth will increase as the GOI seeks to rebuild the devastated areas formerly held by ISIS. Let alone the start of those housing projects already approved by the GOI, who's contracts were awarded to that S.Korean company. That alone should employ plenty of out of work Iraqis. The cement companies  must be ready to crank out product, as well.as.the other non oil businesses. Replant those farm lanrs. Debt at 12% of GDP, our country should be so.lucky. Over all good stuff.  Now to see what ya'll put down.

You the man Chucky.

Edited March 17, 2017 by new york kevin

[new york kevin]

Oh yeah, and the exchange rate held, despite all the economic crisises surrounding oil, ISIS, and a sluggish non-oil sector. Once The GOI and the Commander in Chief solidify all Iraqi territory security wise, they will eventually transfer to a peacetime economy after placing all their assets to support the war against ISIS. Remember  the economic boom we experienced when we returned to a peacetime economy post WW II.  I hope and pray Iraq has a M.E. version of that.

 

For the record i didn't  read what Synopsis wrote befor typing my take. That said, let us pray that is a heavenly designed occurance, in that whenever 2 or more are in agreement He is amongst that. Amen. 3 snaps up in a Z formation.

Here's to 2017 or SOONER  DV'er's. : )

Edited March 17, 2017 by new york kevin

[Synopsis]

10 minutes ago, new york kevin said:

 

For the record i didn't  read what Synopsis wrote befor typing my take. That said, let us pray that is a heavenly designed occurance, in that whenever 2 or more are in agreement He is amongst that. Amen. 3 snaps up in a Z formation.

Here's to 2017 or SOONER  DV'er's. : )

Amen, Brother!

Go Moola Nova!

[SnowGlobe7]

1 hour ago, new york kevin said:

or SOONER  DV'er's. : )

did someone say sooner?? as in 

[NoviceInvestor]

3 hours ago, Synopsis said:

Amen, Brother!

Go Moola Nova!

It is 2017 .. So it has to be sooner... 🙏🙏🙏

[jeepguy]

there is something too the madness , near  the end of the battle , and the rebuilding of Iraq ,   can `t imagine  rebuild with out an international traded currency ,  and  not too mention  the  pay that the workers would  seek  for doing the dirty business ,  dinar needs  value  {  I,m,o,  }  I do not think the government of Iraq would spend all the loan cash  for rebuilding ,  ----  if it we me , I would stash the cash  in the reserves ,  raise the value of the dinar , { the reserves would cover that  easy enough ,  along with the post  we had last week ,  ---  oil is 40 percent of income and  the rest is import fees , and export profits  -----  the economist  column again  }   I do not think raising the value of  dinar  would  hurt the banking at all ... {  example again  , if they can  de-dollarize the country  , and  the  dinar became the money of choice in Iraqi markets all over the country ,  then  the incoming  folks of other countries  would need too trade their countries currencies for dinar too do the trading  and buying every day stuff once they get settled into the job of rebuilding } this would also build the reserves with the spread between the different currencies , and build up reserves even more !      ahhhhh  this voodoo , we  do   

[yota691]

Official statement from the IMF Web site...

The statement issued at the conclusion of the IMF mission on Iraq

17 March 2017

Iraqi authorities and experts of the International Monetary Fund held (IMF) discussions in Amman during the period from 5 to March 17 / March 2017 on Article IV of the 2017 consultations, and the second revision of the agreement to prepare the credit (SBA) with Iraq, amounting to a 36 - month, which was approved by the Executive Board of the international Monetary Fund on July 7, 2016 (see press release No. 16/321 statement ). It aims to prepare the credit agreement to correct the balance of public finances and the balance of the external position, and improving public financial management, while protecting social spending. It was the first complete review under the Stand -By Agreement on 5 December / December 2016 (see Press Release No. 16/540 statement ).

Mr. Christian nut has been made head of the IMF mission to Iraq the following statement:

"Harmed Iraq affected severely due to the conflict with al Daesh, and the sharp drop in world oil prices, since 2014. The government has responded to the fiscal crisis, and the crisis in the balance of payments, large corrects Mali, but necessary, supported by financial assistance from the international community. In 2016 , the real growth of the gross domestic product by 11%, supported by a substantial increase in oil production, which benefited from previous oil investments continued. However, non-oil economy has shrunk by 8% due to the conflict and fiscal adjustment. in 2017, it is expected to remain activity economic dimmed due to reduced oil production by 1.5% under the agreement reached by the Organization of petroleum exporting countries (OPEC), and the modest recovery of the non-oil sector. "

"The sharp decline in oil prices, down Total international reserves of Iraq, from 53.7 billion US dollars has caused the end of 2015 to a level still comfortable, of $ 46.5 billion, at the end of December / December 2016 remains the pressures on public finances, including large , with the government deficit remains at a level of 12% of GDP in 2016, due to continued weakness in oil prices, high humanitarian and security spending. the total public debt rose from 32% to 64% of GDP in the period 2014-2016. slowed credit growth and rising bad loans at state-owned banks and private banks significantly in 2016. "

"Maintained authorities on the exchange rate peg, which is an important par substrate. The remaining growth prospects in the medium term modest because of the expected oil production constant, and the stability of its investment in the face of constraints on revenues, and the recovery modest in the non-oil growth, supported by the improvement expected in the security situation, and the implementation of reforms structural. there is a need for more reforms to create fiscal space inclusive growth, and enhance the business environment, reduce corruption, and reform of the banking sector to support growth led by the private sector, and diversification in the economy, once the reconstruction process starts in the post-regulation Daesh. the remaining risk high; this stems mainly from uncertainty surrounding the prospects for oil prices, the security situation and political uncertainty, and a citizen of management weaknesses. "

"Iraqi authorities and experts of the International Monetary Fund began discussions on the second revision of the standby credit agreement. These discussions will continue during the coming spring meetings of the International Monetary Fund and the World Bank in the period between April 21 to 23, 2017 in Washington, DC."

"I met with the team during the mission with the Minister of Finance Acting Prof. Dr. Abdul Razak A. Jalil Issa, the Governor of the Central Bank of Iraq by proxy, Mr. Ali Mohsen Ismail Keywords, and consultant Dr. premier appearance in favor, and officials from the Ministry of Finance, the Ministry of Oil and the Ministry of Planning, and the Oil Marketing Company (SOMO), the Central Bureau of Statistics, the Iraqi Central Bank, and representatives of the Kurdistan Regional Government, and the Office of financial supervision. wishes to fund a group of experts that Aaburan thanked the Iraqi authorities for their cooperation and to make this an open and fruitful talks. "

Communication management, the International Monetary Fund

Department of Media Relations

OFFICIAL PRESS AFFAIRS:

[tigergorzow]

5 minutes ago, yota691 said:

the Governor of the Central Bank of Iraq by proxy, Mr. Ali Mohsen Ismail Keywords,

Yota Thanks,  DV,  It looks like CBI Governor is only serving as Proxy

 

7 minutes ago, yota691 said:

I met with the team during the mission with the Minister of Finance Acting Prof. Dr. Abdul Razak A. Jalil Issa, the Governor of the Central Bank of Iraq by proxy, Mr. Ali Mohsen Ismail Keywords, and consultant Dr. premier appearance in favor, and officials from the Ministry of Finance, the Ministry of Oil and the Ministry of Planning, and the Oil Marketing Company (SOMO), the Central Bureau of Statistics, the Iraqi Central Bank, and representatives of the Kurdistan Regional Government, and the Office of financial supervision. wishes to fund a group of experts that Aaburan thanked the Iraqi authorities for their cooperation and to make this an open and fruitful talks

DV,  All of Iraqi Power Hitters attended this meeting to include KRG representatives.

[skeetdog]

Thanks Yota...This seems to be an opened and fair evaluation of Iraq's present situation...This statement only clarifies the needed procedures to correct Iraq's problems and direct Iraq toward a prosperous economy...I read nothing condescending about anything we didn't already know...Seems this article addresses what has held Iraq back and suggest what Iraq needs to do to correct their future activities...This ending para