IMF End of Mission Press Release

[George Hayduke]

Statement at the End of an IMF Mission on Iraq

Press Release No. 14/560
December 9, 2014

 

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. This mission will not result in a Board discussion.

 

 

A staff team from the International Monetary Fund (IMF) led by Carlo Sdralevich visited Amman, Jordan from December 2−7, 2014 to conduct discussions with Iraqi Minister of Finance Hoshyar Zebari, Central Bank of Iraq (CBI) Deputy Governor Zuhair Ali Akbair, and other officials from the ministries of finance and planning and the CBI to assess the country’s recent economic developments. Discussions focused in particular on the impact of the double shock of the Islamic State of Iraq and Syria (ISIS) insurgencyand the decline in oil prices. At the conclusion of the visit Mr. Sdralevich issued the following statement:

“Iraq’s GDP is expected to contract by about 0.5 percent this year largely because of the economic effects of the ISIS insurgency. We estimate non-oil growth to have deteriorated since the start of the conflict due to the destruction of infrastructure, impeded access to fuel and electricity, low business confidence, and disruption in trade. In contrast, as most of the oil infrastructure is in the south of the country and beyond the reach of ISIS, and taking into account the output of Kurdistan Regional Government (KRG), oil production should reach 3.3 million barrel per day (mbpd) in 2014, up from 3.1 mbpd in 2013, with exports remaining at 2013 levels of 2.5 mbpd. Next year, growth is projected to rebound to about 2 percent as oil production and exports increase further, helped by the recent agreement between the central government and the KRG on oil exports from KRG and the Kirkuk oil fields. End-October year-on-year inflation was 0.9 percent outside the conflict-affected provinces.

 

“The central bank has maintained the peg with the U.S. dollar. The spread between the official and parallel exchange rates narrowed to 2.6 percent in September, thanks to steps taken by the CBI towards the liberalization of the foreign exchange market. Nevertheless, high imports, combined with declining oil revenues and lower government sales of foreign exchanges to the CBI to finance government spending, contributed to a decline in international reserves from over $77 billion at end-2013 to about $67 billion at end-November. The government also tapped the Development Fund for Iraq (DFI), the balances of which have now been transferred to the CBI; the DFI declined from $6.5 billion at end-2013 to about $4 billion in November.

 

“The government expressed its commitment to present a draft 2015 budget to parliament soon. Lack of parliamentary approval of the draft 2014 budget has triggered a fiscal rule that has partly limited spending this year. However, off-budget spending, particularly on security, has boosted the deficit, which will likely reach about 5 percent of GDP. The staff team discussed with the ministry of finance the challenges related to formulating the draft 2015 budget, which is intended to address the ongoing exceptional spending pressures and the strong decline in oil prices. As projected financing in 2015 will be limited, we expect the government deficit to decline to less than 2 percent of GDP.

 

“The IMF will continue to support Iraq through policy advice, technical assistance, and training. The 2015 Article IV consultation discussions with the authorities will take place in the coming months.

 

“The IMF mission would like to thank the Iraqi authorities for their cooperation and the open and productive discussions.”

 

[staunch]

Ooph.............it is what it is. Not bad considering all that has happened in the last year, I guess.

[TrinityeXchange]

sounds like the perfect time for iraq to correct their down turn by adding value to their currency.

[blueskyline]

Extremely Interesting day . I would think a few things would take place before THIS annoucement

[ckriebs]

HMMMMMMMMMMMMMMMMMMMMMMMMM

[eburt]

HMMMMM is right!! What does this article mean??

[bostonangler]

The IMF isn't exactly saying... You hit it out of the park boys, now go have a pizza...

 

It means we wait.

 

JMHO

 

 

B/A

[v-star 650]

notice  the fall in the  d-f- I   funds ,  we  thought  { me  I guess }  that  the  d-f-I  funds  were  pretty much  at a  stand still in foreign  banks  until the  right time  the central bank decided too  take  control  and  give  growth too the  dinar  or  something in the line of  central banks  consents .......    now I wonder  how  much  malarkey  made off with  , I do remember  a post where  they  some how had too signature  release   deals  too let  the funds be  spent .......   wonder which  of malarkies  cronnies  had  a  pen  ?   { but  all in all ,  this is a  slight  positive  statement  from I m f   ,    }

[skeetdog]

Thanks Haydukes...Iraq may not've knocked it out of the park....But I think they've just pulled off a lazy looper into right field that's got Iraq with a stand-up triple and the score tied...No Outs, bottom of the ninth with the clean-up man in the box....

[Nelg]

Projects for 2015: (JMO)

1.  End the conflict with ISIS quickly.  It is a drain on the off budget spending.  (US and Coalition Forces will soon have a total of 4,600 troops on the ground in Iraq.  Objective: eliminate ISIS, retake northern oil factories and facilities, secure the cities taken by ISIS).  

2.  Raise oil production by 33% over present production. (Already plans are to increase production by 500K bpd.)  Increase oil price to at least $70 per barrel. (Oil should start to rise in price by the end of March 2014.)

3.  Increase foreign business investments into Iraq.  (This comes as ISIS is removed and security is restored.)

4.  Revalue the currency.  

 

Results:  We all become "happy campers!!"

[DWitte]

Nelg.

Item #2.  I really hope there's a typo in there somewhere.  In fact, I know there is.  I've read too many of your posts.  I know better and I know everyone else does too but I just had to tease you a bit.  Ok, your turn.  I can take it.  Do I have to put a "lol" in here somewhere or maybe a "ha ha"?  Oh well, have a good evening all.

[Tirebiter]

I'm no economist or monetary expert but I think this article only reinforces the obvious. Iraq has taken a hit financially and economically due to a variety of circumstances we have all discussed and observed for the past year. I will say it actually puts forth a positive look given the losses percentage wise are minimal given the events. Give me confidence they continue to weather storms.

[Butifldrm]

Well the good news here is that Iraq has suddenly become a team player in the IMF game.  Iraq has now/since the end of November brought the Market rate within 2% of the CBI rate.  

If Iraq can maintain that 2% spread for the specified time mandated by the IMF, they will be able to accept Article VIII mandates and move into a Market economy.  What a waste of time and corruption the past 8 years have been for Iraq.  I pray they can move forward with their economic reform and comply with the IMF mandates.  They got spanked today for not being within compliance.

[Nelg]

Nelg.

Item #2.  I really hope there's a typo in there somewhere.  In fact, I know there is.  I've read too many of your posts.  I know better and I know everyone else does too but I just had to tease you a bit.  Ok, your turn.  I can take it.  Do I have to put a "lol" in here somewhere or maybe a "ha ha"?  Oh well, have a good evening all.

I wish it had been 2014!!  LOL.   How about 2015.  Thanks Dwitte. Tee heee, heeeeee.  

[sandfly]

THANKS

[RV on my mind]

Yep, Just as I thought!        Beat that dead horse!  

[Laid Back]

Abadi and the new GOI are doing an excellent job.

Those numbers from the IMF will change soon.!

Go Iraq, Go strong

[SocalDinar]

Thanks George

 

Plenty of articles out today regarding this Formal Statement.

 

http://www.imf.org/external/np/sec/pr/2014/pr14560.htm

[yota691]

Controversial economic downturn stimulates find alternatives

 

 

         

12/15/2014 0:00 

Increase oil production and the multiplicity of resources Ikllan effects 

BAGHDAD - Hussein al-Tamimi Tgb 

after the International Monetary Fund forecast the Iraqi economy shrink 0.5 percent because of what the country is going through as a result of the repercussions of terrorism Aldaasha, economic affairs experts downplayed the impact of the downturn in the economy, especially after the agreement with the Kurdistan region and the addition of 550 000 barrels of crude oil to Iraqi exports. 

The International Monetary Fund said in a press release that he is expected to contract by Iraq's economy, which depends mainly on oil 0.5 percent this year, far less than the previous forecast of the Fund two months ago contraction of 2.7 percent. 

After talks with Iraqi officials confirmed it is expected that oil production up to 3.3 million barrels per day in 2014, up from 3.1 million in 2013 with exports continued at levels in 2013 amounting to 2.5 million barrels per day. 

Economic Adviser to the Prime Minister Dr. The appearance of Mohammed Saleh said in an interview with "morning" that the recession is to be expected after that saw a number of provincial military operations halted all economic activities in which, as well as agricultural production stopped in Baghdad belt, which is characterized by abundant production of crops that cover a large percentage of the country's need . 

The expectation in favor of it after the oil agreement with the province will see gross domestic product growth rate of 3 percent after the International Monetary Fund forecast an estimated 2 percent, urging the necessity of activating the agricultural production in the country to contribute to raising the gross domestic product ratio, especially after it became a cover ratio great local need in times of peak productivity. 

He noted that Prime Minister Dr. Haider al-Abadi adopted agricultural output file and activate the agricultural initiative and took supervised in person on this detailed productive is important in order to bring life to the agricultural sector, in the serious step of the multiplicity of the federal budget resources. 

Saleh said the government program going despite the challenges and work to balance out productive meet the ambition and support operations achieve victory in the war, as the country faces two wars at the same time firstly addressing gangs terrorist Daash, and the other is low crude oil prices in world markets, and these require a perfect economic policy of the force of the impact, pointing out that the stability of oil prices, does the growth of the country's economy. 

Head assembly Iraqi industrial Abdul Hassan Shammari said in an interview for the "morning" that exceeded the contraction phase experienced by the economy requires the activation of the productive sectors, especially the construction and reconstruction operations and projects, productivity and service stopped its activity in a number of cities that witnessed military operations and this lowers the GDP index . 

The IMF found that growth is likely to recover to about two percent in 2015 with the increase in production and exports of oil with the support of the recent agreement between the central government and the Kurdistan region over oil exports and payments budget. 

The economic expert Mustafa Abdul-Hussein al-Maliki has pointed out that the Fund IMF predicted a contraction of 0.5 percent in 2014), which also seems better than the previous forecast, which amounted to 2.7 percent, and expected time the same economic growth up to 2 percent next year 2015 due to the recent agreement between the center and the region about revenue sharing and understanding on the production and export in addition to strengthening the infrastructure of the oil industry in the south, which used to supplement the single budget source for more money, despite the sharp decline in oil prices, which emerged after the month of September, indicating that the growing present crisis is the result of the low rate of growth in non-oil sectors because of the battles and vandalism suffered by the sector electricity in combat zones, and low confidence in the investment side rates, and even damage to the commercial sector, and this is reminiscent of the chronic condition diagnosed in advance about the sovereignty of the oil revenues, which generate more than 90 percent of the financial revenues. 

Maliki said: The report is expected to increase high productivity in the south, where No Tahedadhnak, pointing to the urgent need to strengthen water injection projects, and energy storage, and pipelines, and complete the infrastructure for the capabilities of export. 

As concerned the honored economic Tawfiq Al Mana said the "morning" The impression which has taken on the oil industry in Iraq, more glamorous because Most of the facilities and fields Iraqi oil present in the south of the country away from terrorist threats anticipated that Iraq's oil production up with what is produced from oil in the Kurdistan region to 3.3 million barrels per day, which was an average of 3.1 million barrels per day with the survival of export as it is rates since expectations 2013 at the level of 2.5 million barrels a day. 

He pointed to the importance of working to increase execution efficiency in the government apparatus and the diversification of the national income.

[yota691]

Conscious / IMF: Iraq's humanitarian crisis led to a large exodus of millions and the destruction of infrastructure

12/15/2014 03:47:00 number of readings: 6

 

 

Conscious / Baghdad / FS

The International Monetary Fund said that "the violence in Iraq has led to the destruction of the economic activities and create a major economic crisis to neighboring countries, with the exodus of millions of refugees to it."

The deputy director of the Middle East Department of the Fund Adnan farmers in a press statement today that "the IMF is providing advice for Iraq and the countries that suffer from the effects of the crisis," he said. "Once you stop the violence, we are ready to provide technical assistance and advice, and if you want to countries in financial aid The International Monetary Fund is ready to be presented. "

"The Fund has three areas to help is to provide loans and financial assistance and advice on economic policy and support in raising the capacity of government."

The International Monetary Fund announced that the "rise of Iraq's oil exports will reduce the contraction of the economy," noting that "it is expected that oil production up to 3.3 million barrels per day in 2015".

According to a statement of the fund in 10 of the current month, "is expected to contract by Iraq's economy, which depends mainly on oil, 0.5% this year, much less than the previous forecast of the Fund two months ago contraction of 2.7%.".

"The fund is likely to recover growth to about 2% in 2015 with the increase in production and exports of oil with the support of the recent agreement between the central government and the Kurdistan region over oil exports and payments budget.".

He said the fund that statement, "With the shrinking funding is expected in 2015, we expect that the government deficit is reduced to less than 2% of GDP.".