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Central Banks, The fallout Of Corona !


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Parliamentary Finance: The rise and fall of the dollar in the Iraqi market, leaving its issue to the relationship!


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Last updated: April 4, 2020 - 11:44 am


 Baghdad / Iraq News Network -

The Finance Committee in Parliament commented, today, Saturday, on the central bank’s decision to stop the flow of the dollar to the market with the aim of floating the dinar and reducing its value, in order to fill part of the budget deficit and the needs of the government.

The committee’s rapporteur, Ahmed Al-Saffar, said in a press interview, that “Reading the central bank’s intention to stop the flow of the dollar and floating the dinar to fill part of the state’s budget deficit is impossible, but it may be in harmony with the current situation to compensate for the shortfall in oil revenues.”

Al-Saffar added, “At the same time, the central bank may also be unintentional Because of the curfew and the suspension of most of the life activities. ”

And a decision took place Finance Committee in Parliament, Ahmed Al-Saffar, last Sunday, on the authority of the Central Bank regarding its issuance of a set of decisions on withdrawing the commission of the US dollar. Who determines the interest rate, whether by depositing or withdrawing?

On Sunday (March 29, 2020), the Central Bank of Iraq issued a set of decisions regarding the US dollar withdrawal commission. And included a document issued by the bank and received (Baghdad today): "The commission for withdrawing cash for the US dollar, which comes from the incoming transfers to the bank to our accounts in the American Federal Bank, as well as the transfers received to banks from other banks by a rate of seven thousand." 

The bank added: "The amounts of the above remittances are transferred to banks by (75%) in cash in dollars according to the above commission, and (25%) pay Iraqi dinars at the official bank rate (1182) dinars to the dollar."

He continued: "The banks must spend the (25%) above on their remittances customers at a price of (1200) dinars / dollars, and submit their requests at the end of each month to the accounting department at the central bank for the purpose of handling the two price differences in their accounts in Iraqi dinars."

And he continued: "Banks can spend the full amount of the transfer received in the Iraqi dinar if the customer desires to do so, and the two price difference are dealt with by the same mentioned mechanism."

He stressed, "The above mechanism does not include customer deposits in dollars in cash, where it is paid to the customer in full, but is limited to customers who receive remittances received from outside Iraq of any kind, and internal dollar transfers between their banks in our accounts."

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Dr.. The appearance of Mohamed Saleh *: Current movements of the exchange rate on the parallel market: why and how?


04/04/2020


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The exchange market has been subject to a state of volatility that exceeds the accepted standard stability rate of 2% between the official central exchange rate of the dinar against the dollar and the exchange rate in the parallel market. To address the causes and factors of this phenomenon, we can say that there are two main binary influences factors related to macroeconomic expectations and its impact on the global recession due to the world’s closing to itself under the influence of the Corona pandemic, and the other because of the ongoing oil price war that has lost Iraq a major oil rent. Losing one dollar per barrel of exported oil throughout the year loses the country an annual amount of one billion dollars.

 

With this, the country took important financial resources during the past eight weeks, as it exceeded its daily amount by about $ 40 per barrel of crude oil exported, compared to what oil revenues were in the beginning of the year 2020.

 

Such an oil shock is generating a double deficit in the two most important parts of the overall economy: First, a high current account deficit in the balance of payments relative to gross domestic product tends to be at the level of two decimal places and is a major influence on economic stability criteria. While the other dual effect is a deficit in the revenues of the public budget, which depends on oil revenues by 93%.

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“Such an oil shock is generating a double deficit in the two most important parts of the overall economy: First, a high current account deficit in the balance of payments relative to gross domestic product tends to be at the level of two decimal places and is a major influence on economic stability criteria. While the other dual effect is a deficit in the revenues of the public budget, which depends on oil revenues by 93%.“


I hope the double deficit force the CBI to RV the dinar.

 

 

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Finance Minister: Closed meeting to fund Iraq in the face of Corona

 

Finance Minister: Closed meeting to fund Iraq in the face of Corona
 
 
04/6/2020 11:17:30
 
 
Finance Minister Fuad Hussein participated in a closed meeting aimed at financing Iraq in the face of the Corona pandemic.
 
Hussein said in a tweet on his Twitter account: "I participated in a meeting via closed-circuit television, to discuss the economic and financial situation and the implications of falling oil prices on the Iraqi economy and study some proposals to overcome the crisis."

Hussein added: "We also discussed the meeting in which the ambassadors of the United States and Britain and the representative of the World Bank and the International Monetary Fundparticipated in addition to the Undersecretary of the Minister of Health, the Corona pandemic crisis and the steps taken to support the health sector in Iraq to contain this dangerous epidemic."
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6 minutes ago, DinarThug said:

Finance Minister: Closed meeting to fund Iraq in the face of Corona

 

Finance Minister: Closed meeting to fund Iraq in the face of Corona

 

The Minister of Finance participates in a videoconference to discuss the financial and economic situation

 
 
Baghdad / Nina / Fuad Hussein, Deputy Prime Minister for Economic Affairs and Minister of Finance, participated today, Sunday, in the coordination meeting to provide the required support to the health sector to combat HIV and Corona disease.
This meeting was held via closed-circuit television, in which the British and American ambassadors and Hazem Al-Jumaili, Undersecretary of the Ministry of Health, participated in the televised meeting, the World Bank official for the Middle East and from Amman the representative of the International Monetary Fund and responsible for Iraq.
Fouad Hussein highlighted the work of the Ministry of Finance and its efforts in providing financial requirements and urgent needs to support the health sector in Iraq since the beginning of the crisis, as the ministry took the necessary measures to collect money through banks or through collecting donations, whether from some donor countries or through governmental and private banks And the private sector as well.
In another axis of the meeting, the general economic and financial situation and the impact of the international crisis on the Iraqi situation and the confusing challenges facing Iraq,whether in terms of fighting the disease or the sharp decline in oil prices, in addition to the political crisis related to the formation of the government were also touched on, as was the relationship with the World Bank And the International Fund.

The Deputy Prime Minister stressed the importance of deepening relations with both financial institutions.

And discussed how to financial support to Iraq in general and the health sector in particular.

As for the issue of external borrowing, the matter requires legal approvals from the executive and legislative authorities, indicating that the ministry is currently preparing a letter to the World Bank to obtain additional financial assistance for the health sector.

For his part, the bank and the International Monetary Fund officials affirmed their readiness to respond quickly to provide assistance to the government of Iraq and to restructure some of the specialized programs in the health sector to meet the needs of fighting Corona.

Fouad Hussein expressed his thanks to the ambassador of the United States of America for the financial and logistical support that his country provided to the health sector in Iraq and in the field of fighting Corona disease, welcoming any financial support that might be provided by other countries in this context.

Hazem Al-Jumaili, Undersecretary of the Ministry of Health, outlined the steps and measures taken by the Ministry of Health and the competent committee to combat HIV since the beginning of the disease.

He mentioned the numbers of the injured and the dead, and the need of the Ministry of Health for health equipment and technical support. He also talked about the future steps that the ministry will take in this regard. / End 8

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The Trade Bank of Iraq issues an explanation regarding the work of ATMs

 

The Trade Bank of Iraq issues an explanation regarding the work of ATMs
 
 
4/6/2020 16:36:23
 
 
The Iraqi Trade Bank issued today, Monday, an explanation regarding the work of ATM machines.

 

The bank said in a statement, "All ATMs continue to operate around the clock in Baghdad and the provinces."
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Why does China seek to acquire Iraqi oil?

 

6th April, 2020


The US "Oil Price" website indicates that China is racing against time to complete what has been called a "lifelong oil deal" with Iraq. With the United States preoccupied with fighting Corona, Beijing believes that it is open to it in Iraq, according to the site.

On this issue, economist Hammam Al-Shamaa said, "In its relationship with Iraq, China has three aspects, one political aspect, that Iraq is a key to the Middle East, and another economic, considering Iraq is the second oil producer in the "OPEC", and the third technician, since Iraq represents The key to the Silk Road.”

Al-Shamaa continued by saying, China can find an alternative to Iraq that will supply it with oil, but finds the key to it as it aspires to, so it seeks to develop its economic potential. Through Iraq, China reaches promising markets.”

Al-Shamaa added, "Iraq will remain for a long time an importer of Chinese goods, unlike some countries that have started relying on themselves, so Iraq is very tempting for Chinese exports."

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2 hours ago, DinarThug said:

On this issue, economist Hammam Al-Shamaa said, "In its relationship with Iraq,”


And His Dr Suess Counterpart - Economist Dr Green Eggs And Hammam Said ...

 

 

Is The Relationship With Okie In A Boat ...

 

Is The Relationship With Kraperoni In A Float ...

 

Would It - Could It Be With Weegie On A Goat ? :o 

 

:D  :D  :D 

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The Central Bank of Iraq expresses its thanks to the Association of Banks and Private Banks after their contribution to the distribution of employees' salaries


 

7th April, 2020

 

The Central Bank of Iraq expressed its thanks to the Association of Iraqi Private Banks and private banks operating inside Iraq for their contribution to facilitating the distribution of salaries of employees and retirees for the month of March

The central bank said in a press statement received by "Al-Iqtisad News", "In conjunction with the state's efforts to combat Corona virus, all salary funds and pensioners were granted for the month of March of the year 2020 through a system of high-flow payments from the Ministry of Finance to employee accounts in various branches of government banks. And eligibility, especially those whose salaries were localized using "electronic cards" in the process of cash withdrawal from ATMs or outlets in Baghdad and all governorates after the relevant departments in the Central Bank of Iraq resumed their work since the date of March 24, which helped support the full liquidity of money Wharf

"Here, the central bank thanks all who contributed to facilitating the task of distributing these salaries from the Governmental and Parliamentary Crisis Cell, the Ministry of Finance, the Association of Private Iraqi Banks, government and private banks, electronic payment companies and their agents

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Trump says OPEC did not ask him to cut US oil production


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7th April, 2020

 

US President Donald Trump said that OPEC did not pressure him to ask the US oil producers to reduce their production to support global crude prices, which have witnessed a sharp decline due to the economic consequences of the emerging Corona Virus pandemic but he said that US oil production actually fell anyway.   "I think it happens automatically, but no one has asked me to, and we'll see what happens," he told a news briefing late on Monday

Three informed sources told Reuters on Monday that the major oil producing countries, including Saudi Arabia and Russia, are likely to reach an agreement to cut production at a meeting on Thursday, but that will not be achieved unless the United States participates in those efforts.  "Without the United States, there is no agreement," someone said

Global demand for oil has fallen nearly 30 percent, to about 30 million barrels per day, as the pandemic causes a sharp slowdown in the global economy at a time when Saudi Arabia and Russia have flooded the market with additional supplies

This created a major problem for the economy of the United States, which has become the world's largest oil and gas producer, threatening the sector with bankruptcies and layoffs

Several US companies have already cut their production due to lower oil prices, which have lost nearly two-thirds of their value this year

Last week, the Organization of Petroleum Exporting Countries and its allies, including Russia, a group known as OPEC +, began talking about reducing production after weeks of disputes, but they wanted the participation of other non-OPEC countries, especially the United States

The new discussions between OPEC + countries came after Trump pressed Riyadh and Moscow to reach an agreement through a series of phone calls. Trump said last week that he had made no concessions and had not agreed to cut US production

Any concerted decision among American oil producers to cut production to support prices would violate US antitrust laws but Barbara Secales', anti-trust expert in Pepper Hamilton says it can be argued that leading the federal government to such endeavors could render those efforts unlawful

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Al-Nusiri: Corona’s emergency budget is around $ 50 billion


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7th April, 2020


Economic and banking expert, Samir Al-Nusiri, expected, on Tuesday, that the emergency budget that government agencies are currently studying to prepare in light of the expected oil revenues for the three quarters of 2020 will not exceed $ 50 billion.

Al-Nusairi said in an interview with "Al-Iqtisad News" that the sharp decline in oil prices to 50% compared to its prices before the spread of Corona virus, which Iraq cannot sell its oil by more than (25‐30) dollars a barrel, and this means that our oil resources in the best case will not exceed 40 One billion dollars for the year 2020, and oil and energy experts expect that there will be an improvement in prices after the understanding between Saudi Arabia and Russia and the OPEC production and marketing cuts and measures taken by OPEC countries and other oil producing countries outside the organization. Despite this optimism, the expected prices after the improvement do not exceed 40 dollars per barrel Humiliation I expect that after our budget structure will not to exceed $ 50 billion.  

Al-Nusseery demanded that the government and its technical committees end the preparation of the emergency budget in the month of April and be submitted to the parliament and approved by a date not later than next May. This requires the existence of a new government with full powers in order to work to implement the budget and start working with it, proposing the following:

First - Implementing a new program and approach Financial reform begins with reducing public government spending and reconsidering a comprehensive amendment of the government salary scale for state employees to achieve societal justice and exceeding the large disparity between grades and job positions according to the principle of fairly redistributing income that includes societal balance between narrators B Higher and lower salaries, based on the fact that the source of income is oil, which is, as indicated by the constitution, that it belongs to the Iraqi people, and this does not prevent the redistribution of salaries in accordance with the responsibility, competence and professional and scientific experience.

Second - Reducing salaries, allocations, and social benefits for the three presidencies, the House of Representatives, ministers, independent bodies, special grades, and their own pension salaries who previously worked in these locations since 2003, and at an equal rate to the rate of reduction achieved in Iraq’s resources in 2020 with a commitment to secure the salaries of employees with lower, middle, and retired borders And welfare.

Third - Securing the allocations for facing the Corona epidemic of the Ministry of Health in Baghdad and the provinces.

Fourth  Securing the amounts allocated to the reform decisions that the resigned government committed to implement the demands of the demonstrators, including with regard to granting benefits to the unemployed.

Fifthly - coordination between the financial and monetary policies to maintain the stability of the exchange rate, maintain the standard adequacy of the foreign monetary reserves of the Central Bank, and avoid external borrowing absolutely.

Sixth - Motivating and encouraging the private sector and involving it in managing the economic process.

Seventh ‐ Stop importing semi-essential and luxury items, restrict importing food ration materials, medicine, and medical supplies, while increasing the food basket for the Iraqi family and building a strategic store of food for at least three months inevitably.

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Representatives and experts propose {several alternatives} to overcome the financial crisis


Tuesday 07 April 2020


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Baghdad / Shaima Rashid

 

 
A number of House members and economists have proposed several alternatives to overcome the financial crisis, due to the decline in oil prices, such as selling bonds, lands and state-owned companies, calling on the government to take care of agriculture to secure food for the country.

Member of the Parliamentary Finance Committee, Jamal Kujer, stated that to get out of the current crisis, it requires activating many vital sectors that can double the country's imports and support the financial budgets.
Cougar told Al-Sabah: The economic situation is unknown because the future of the country's people is linked to fluctuating oil prices, so resources should be multiplied in order for the situation to stabilize, indicating that the current period is important to prepare the situation for the future.
He added: that Iraq should go towards agriculture in order to secure food security while going towards decentralization by shrinking the ministries while eliminating corruption in a real way.

For his part, member of the Parliamentary Economy Committee Mazen Al-Faili called in a statement that Al-Sabah received a copy to reduce the salaries of those with the rank of general manager and above by (60%) and be allocated to include additional numbers in the social welfare network who have no monthly income andthe adoption of compulsory savings with bonds Governmental employees, whose salaries exceed three million and 20% of their salaries and at an interest rate that is met when the country's economic conditions improve.
He called for the abolition of investment expenditures in the 2020 budget and the current expenditures for non-essential doors (such as commodity and service requirements and capital expenditures) that include unjustified expenses in stable conditions, so how in such dangerous economic conditions.
He added that a special emergency budget must be allocated to cover the requirements of fighting the "Corona" epidemic and spending it for operational and investment requirements, according to specific priorities in the conditions and standards of health reality and its challenges, while meeting the due funds and taxes imposed on the transport phone companies without any delay or installment.
He demanded the adoption of strict procedures in controlling and collecting non-oil revenues, especially in border outlets and for all governorates and the region and recording a federal revenue that is fairly distributed among all Iraqis while delaying the payment of all external debts, including Kuwait compensation.
He stressed the need to agree with licensing tour companies to reduce unnecessary costs on the one hand and pay the dues of its current work with oil, instead of cash to reduce losses to Iraq from lower oil prices while delaying all economic agreements with neighboring countries or China in the foreseeable time, especially Its fields are not a priority, and some are unfair in Iraq.
Al-Fili sees the need for the region to commit to delivering all the oil produced to the Ministry of Oil for federal marketing. Otherwise, its allocations allocated in the budget will be transferred to be distributed among the rest of the Iraqi governorates according to the population ratio, which is a budget of approximately (15) trillion dinars.
He also called for the issuance of national bonds to citizens through government banks at an encouraging rate of interest that will be met when the economic conditions improve to finance the necessary budget with important allocations while activating efforts to combat corruption, especially the major files to collect the huge funds seized by the corrupt and reallocate them to resources and important exchange gates.
And a member of the House of Representatives called for finding quick, easy and transparent mechanisms to deliver the ration card materials and social network care salaries within a week and enough to cover the need for those covered by them for at least two months.

In addition, economist Alaa Globe Al-Fahd indicated that the government faces an unenviable challenge with the collapse of oil prices and the spread of the "Corona" epidemic that paralyzed all sectors, calling on the government to consider alternative ways to bridge the deficit. 
Al-Fahd said: "The general situation of the whole world is heading towards recession and economic stagnation, especially the oil-dependent countries, including Iraq, and that falling prices put us in front of a challenge to find alternatives, and at this stage is very difficult as a result of the spread of the Corona epidemic and disrupting most sectors."
He added, "We must not stand idly by, and search for sources of financing through partnership contracts with the private sector so that the private sector takes its role and does not rely on the government to manage economic activity," calling for "the necessity of revitalizing the agricultural and industrial sector to have a role in providing the food basket."
Al-Fahd indicated that the next government faces a major challenge regarding the economic situation and the need not to rely solely on oil even if there is a rise in prices in the future, stressing that Iraq has many alternative alternatives to the oil sector.
He pointed out that the independent central bank cannot manipulate its reserves or print the currency, but there are solutions offered, including issuing bonds for sale, but is there trust between the citizen and the government, pointing to the need for the government to go to other ways to get out of the crisis such as selling bonds and selling plots of land and companies owned by her.
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Oil rises as hopes of reducing production increase

 

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7th April, 2020


Oil prices rose on Tuesday amid hopes that the major crude producing countries will reach an agreement to cut production with demand falling due to the pandemic of the emerging Corona virus, but analysts have warned that a global recession may be greater than expected, which means the need for further reduction.
 
Brent crude rose 80 cents, or 2.4 percent, to $ 33.85 a barrel by 0657 GMT, after seeing a drop of more than 3 percent on Monday. US West Texas Intermediate crude rose 83 cents, or 3.2 percent, to $ 26.91 a barrel, after falling nearly 8 percent in the previous session. 
Sources told Reuters that it is likely that the major oil producing countries, including Saudi Arabia and Russia, will reach an agreement to cut production during a meeting on Thursday, but this will depend on the accession of the United States. But the risk of a deep recession continued to cast a shadow over the markets due to the disruption of most economic activities due to the Corona pandemic, which caused about half of the world’s population to undergo general isolation measures, restrictions on movement and social distances.

Global demand for crude fell about 30 percent, or 30 million barrels per day, in conjunction with Saudi Arabia and Russia’s move to flood markets with additional supplies after a deal to cut production collapsed. Oil prices fell sharply on Monday after Saudi Arabia and Russia postponed a meeting to agree to cut production until Thursday. The Organization of Petroleum Exporting Countries and other producing countries such as Russia, in the framework of the grouping known as OPEC +, reduced production in the past years in light of the rapid expansion of crude production in the United States and placed it first as the largest oil producer in the world. 

There are questions about the US joining any coordinated cuts to production. US President Donald Trump said on Monday that OPEC had not pressured him to ask U.S. oil producers to cut their production to support global crude prices, but he indicated that U.S. oil production actually decreased in any case due to falling prices. "I think it will happen automatically, but no one has asked me and we will see what will happen," he told a news briefing late on Monday. A few weeks ago, due to the pandemic, Capital Economics said in a note, “We expect energy prices to remain at current levels until economic activities recover.” 

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TRADE BANK OF IRAQ


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6th April, 2020

 

In recognition of the exceptional circumstances of our dear country due to the new corona virus

I decided to manage the Iraqi trade bank
Mr. Faisal God suck the president of the Iraqi trade bank and the chairman of the board

All branches will be on Monday and Wednesday every week from 9:30 am to 2:30 pm at the moment.

The bank offers withdraw, cash transfer and bank transfers in all our branches and to all countries of the world including Jordan and Malaysia.

All 260 ATM Atms across Iraq are working around the clock to provide cash draw service to our customers, and that the bank's staff are constantly working to feed them. In Cash shortly after they run out.

The Bank's administration will be posting 50 ATM Atms and 260 Atms this year.

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Advisor to the Prime Minister: the restructuring of the 2020 budget will not disappear, as in 2014

 

Advisor to the Prime Minister: the restructuring of the 2020 budget will not disappear, as in 2014
 
 
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04/6/2020 2020 09:18:52
 
 
The economic advisor to the Prime Minister, Mazhar Muhammad Salih, denied the posting of the draft general budget law for the year 2020 to next year, but he stressed that a decrease in oil prices will change its structure.

 

Saleh said in a press statement, "The news that talks about the posting of the draft budget for the year 2020 to the next year is incorrect, because the budget is still present with the government and will not leave or disappear like the 2014 budget."

He added that "the price per barrel was estimated in the budget at 56 dollars, but after the decrease in oil prices, it will be restructured, given that its dependence on 90% of oil imports."

Saleh explained, "The general budget will secure the salaries of state employees and the importance of projects, either other matters will go into the 2021 budget."
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The Minister of Finance discusses the collapsed Iraqi financial situation with the Bank and the International Monetary Fund


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Last updated: April 6, 2020 - 1:41 PM

 Baghdad / Iraq News Network -

The Minister of Finance, Fuad Hussein, met Monday (06 April 2020) with the ambassadors of the United States of America and Britain, and officials from the Bank and the International Monetary Fund via closed circuit.

Hussein said in a tweet via the Twitter platform: “I participated in a meeting via closed-circuit television, to discuss the economic and financial situation and the implications of falling oil prices on the Iraqi economy, and to study some proposals to overcome the crisis. ”

He added:“ We also discussed the meeting in which the ambassadors of the United States, Britain, and the World Bank representative participated, and The International Monetary Fund, in addition to the Under-Secretary of Health, is a crisis

Corona epidemic and the steps taken to support the health sector in Iraq, to contain this dangerous epidemic. ”


The United States of America had announced, on Sunday (05 April 2020), its willingness to assist Iraq in confronting the new corona virus, during a meeting with the American ambassador Matthew Tooler with the President of the Council The Iraqi Supreme Judiciary.

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The global economy ... recession, recession, or uncharacteristic decline?

 

- One Day Has Passed
 
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International institutions informally unanimously, and many analysts and economists almost decisively agree that the global economy has already entered into a recession as a result of the negative effects on it from the Corona virus (Covid 19).

All of these take into account the largest economy in the world, that is, the American economy, which is equal to nearly a quarter of global GDP at $ 22 trillion. Immediately afterwards, one looks at the British economy - which is a little different from the Eurozone economy - and which has already entered into a recession that it was about to slide into even before the Corona pandemic.

While a large segment of economic analysts, even in the major rating institutions in the world and the investment branches of major banks, see this recession as a strong candidate for recession; that is, a deep long-term recession, not a recession followed by recovery, as in traditional economic cycles, there are those who see The world is already in a depression.

The accuracy of these expectations depends on the time scale of the continuation of the current conditions to confront the Corona pandemic, which means the closure of most sectors of the economy in many countries.

And there remains a group of eminent economists who see that the current global economic downturn differs from all models of traditional economic theories, and that it is not a recession or depression, as the books say, but rather an uncharacteristic retreat, as the economy was “closed” by an active action (as if it was introduced into a medical coma Intended to be awakened from it after the epidemic crisis subsided).

The Great Depression

Those who see the world in a depression are already comparing the Great Depression (1929-1932) over the past century. The most important factor in the comparison indicators is the unemployment rate, with the steady increase in the number of unemployed as a result of the closure of economic sectors to limit the spread of the epidemic.

From 1929 to 1932, the unemployment rate in the United States increased from 3.2 percent to 24.9 percent, meaning that the number of unemployed increased from 1.2 million Americans to 12.8 million at that time.

In Britain, the unemployment rate doubled from 7.2 percent at the beginning of the four depression years to 15.4 percent, to add nearly two million unemployed (1.9 million) Britons to the number of unemployed. With the current restrictions due to the Corona epidemic continuing for several more weeks, the numbers of the unemployed, taking into account the population now compared to a century ago, will become equal to those percentages at the time of the Great Depression, and possibly greater.

The pessimists are based on ratios issued by officials or major institutions for comparison and concluding that this depression will be "greater" than the depression of the thirties of the last century. The President of the Reserve Bank of St. Louis, USA, James Pollard, estimates that the unemployment rate within weeks will reach 30 percent, and the US economy is expected to contract by up to 50 percent.

This may not take into account the government's offering about $ 6 trillion in economic stimulus packages and direct support to businesses and workers, but even that which takes this into account, its estimates are also high. The investment bank "Goldman Sachs" expects a conservative unemployment rate of 13.2 percent and an economic contraction of 34 percent, while Deutsche Bank, the most conservative, expects unemployment in America to reach 12 percent and an economy contraction of 33 percent.

Of course, those figures and figures cannot be compared to what happened in the previous global economic recession in 2008-2009. In that period, the unemployment rate in the United States rose by only 5 percent, and the economy quickly began to improve in 2012. In Britain, the unemployment rate increased from 5.2 percent in October 2008 to 8 percent in early 2010.

An exceptional situation

Beyond the estimates of the pessimists of the Great Depression, and those optimistic about a great recession followed by a recovery, there are those who see that what the global economy is witnessing does not apply to any of that. The economy did not witness a rapid decline, as at the end of any economic cycle, leading to a recession. Rather, the economy suddenly stopped, meaning a sharp deviation of the growth curve to a stopping point.

And if the epidemic is quickly controlled, and as governments prepare to support the economy to resume activity, all of the stalled sectors will resume activity more frequently than previously and absorb unemployment numbers, and growth will rise again by the curve, almost as sharply. Some call it a V-shaped model, while the traditional recession is similar to the "U". Of course, the depression is (U) cut, that is, without the return of growth for a long time, or almost like the letter (L).

Just as it is difficult to predict the future of the epidemic and the ability to contain it now, so it is difficult to anticipate the state of the global economy according to the opinion of these economists. The matter depends on the length of the current pandemic prevention measures and the extent to which major economies are able to withstand "at zero", before restarting.

Ahmed Mostafa

Independent Arabic

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