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normala rashid

IMF Executive Board Completes Second Review of Iraq’s Stand-By Arrangement and the 2017 Article IV Consultation

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The Executive Board of the International Monetary Fund (IMF) today completed the second review of Iraq’s three-year Stand-By Arrangement (SBA), which is designed to support Iraq’s economic reform program and restore fiscal balance over the medium term. The completion of the second review allows the authorities to draw the equivalent of SDR 584.2 million (about US$ 824.8 million), bringing total disbursements to SDR 1494.2 million about US$ 2109.7 million. The SDR 3.831 billion arrangement (about US$5.34 billion at the time of approval of the arrangement) was approved in July, 2016 (See Press Release No. 16/321) and the first review was completed on December 5, 2016 ( See Press Release No. 16/540).

As part of the completion of the second review, the Board also approved Iraq’s request for waivers of non-observance and applicability of performance criteria, and modification of performance criteria. Further fiscal consolidation was achieved in 2016, but at a slower pace than programmed because of weak control of investment expenditure and humanitarian needs. To move the program forward, the authorities are implementing strong corrective measures as prior actions and are committed to further fiscal measures in 2018 to ensure external and debt sustainability.

 

The Executive Board today also concluded the 2017 Article IV Consultation with Iraq. A respective press release will be issued separately.

 

 

Article IV: Obligations Regarding Exchange Arrangements
1. General obligations of members
2. General exchange arrangements
3. Surveillance over exchange arrangements
4. Par values
5. Separate currencies within a member's territories

 

The economic policies implemented by the Iraqi authorities to deal with the shocks facing Iraq—the armed conflict with ISIS and the ensuing humanitarian crisis and the collapse in oil prices—are appropriate. In the fiscal area, the authorities are implementing a sizable fiscal adjustment, mostly through retrenchment of inefficient capital expenditure while protecting social spending. The authorities are appropriately maintaining the peg of the Iraqi dinar to the U.S. dollar, which provides a key anchor to the economy. Performance under the Stand-By Arrangement has been weak in some key areas, but understandings have been reached on sufficient corrective actions to keep the program on track. Resolute implementation of the authorities’ program, together with strong international financial support, will be key.

 

 

Further fiscal consolidation measures are needed in 2017-18 to keep the program on track.

 

“The composition of the fiscal adjustment should be improved over time by increasing non-oil revenue and reducing current expenditure. In addition, reforming the electricity sector and state-owned enterprises will make room for larger and more effective investment expenditure that supports growth and job creation.

Significantly improving public financial management will be important. Arrears need to be assessed and paid following verification, and expenditure commitment and cash management should be strengthened to prevent the accumulation of new arrears.

Measures to bolster financial sector stability include strengthening the legal framework of the Central Bank of Iraq, restructuring state-owned banks, and eliminating an exchange restriction and a multi-currency practice. Measures to prevent money-laundering, counter the financing of terrorism, and strengthen the anti-corruption legislation also need to be implemented.

Implementation of the budget-sharing agreement with the Kurdistan Regional Government would put both the federal government and the Kurdistan Regional Government in a better position to address the shocks to the Iraqi economy.”

 

Further fiscal consolidation measures are needed in 2017-18 to keep the program on track.

:rocking-chair:

 

 

 

 

 

 

 

 

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This statement we are waiting to revalue they currency 

 

´ eliminating an exchange restriction and a multi-currency practice  ´

 

:rocking-chair:

keep the program on the track 2018 . 

Edited by normala rashid
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Sounds good. thanks 

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Florida have said before the next review for imf in september 2018 . What’s ever reform and gov  should do before september . Rv before september . :rocking-chair: i have done with article and predict the date and by article  now just focus to Iraq archieve the requiment before september . 

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On 6/11/2018 at 10:27 AM, normala rashid said:

Florida have said before the next review for imf in september 2018 . What’s ever reform and gov  should do before september . Rv before september . :rocking-chair: i have done with article and predict the date and by article  now just focus to Iraq archieve the requiment before september . 

Think about it for a moment. The first and second reviews happened in August then released in November of their perspective years. The third and final review should it take place in September won’t be released until December of 2018. The RV won’t happen until  the report goes live. One other thing the SBA of 2016 will not have finished before June 2019. IMF will not green light the RV until afterthe SBA has been completed. Why? Iraq is on the edge of missing milestones and benchmarks,for the agreement. They have missed some and received waivers for them. Calling an RV before the SBA of 2016 is complete will be a let down. Not t say this is out of the realm of possibilities but the likely percentage for an RV before June 2019 is really low.

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