In detail.. The International Monetary Fund issues its report on the Iraqi economy and issues a number of warnings

[Laid Back]

IMF Staff Concludes Staff Visit to Iraq

May 31, 2023

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.

• Foreign exchange market volatility and reduced oil production have affected Iraq’s growth momentum.
• The authorities’ fiscal expansion plans could stoke inflation in the short run and pose significant medium-term macroeconomic stability risks. 
• Fiscal discipline and wide-ranging structural reforms are critical to reduce Iraq’s vulnerabilities, strengthen resilience, and achieve durable and more inclusive growth. 

Washington, DC: A staff team of the International Monetary Fund (IMF) led by Tokhir Mirzoev visited Amman, Jordan from May 24-31 to discuss with the Iraqi authorities the recent economic developments and outlook as well as policy plans in the period ahead.

At the end of the mission, Mr. Mirzoev issued the following statement:

“ The Iraqi economy’s growth momentum has slowed in recent months. After recovering to its pre-pandemic level last year, oil production is set to contract by 5 percent in 2023 owing to the OPEC+ production cut and outage of the Kirkuk-Ceyhan oil pipeline. The foreign exchange (FX) market volatility in the wake of tighter anti-money laundering/combating the financing of terrorism (AML/CFT) controls by the Central Bank of Iraq (CBI) on FX sales has adversely affected import-dependent non-oil sectors. Real non-oil GDP is estimated to have contracted by 9-percent (year-on-year) in the last quarter of 2022, negating its growth during the previous three quarters. With the FX market appearing to be stabilizing, helped by CBI’s actions, growth of real non-oil GDP is expected to resume and reach 3.7 percent in 2023. After spiking to 7 percent in January, inflation has begun to moderate—reflecting lower international commodity prices as well as a 10-percent revaluation of the dinar—and is projected to average 5.6 percent in 2023.

“Favorable oil market conditions have supported Iraq’s fiscal and external positions, but structural imbalances continue to widen. In 2022, fiscal and external current account surpluses have reached 7.6 and 17.3 percent of GDP respectively on the back of record-high oil revenues. The CBI’s FX reserves rose to US$97 billion (11 months of imports), including US$16.3 billion (6 percent of GDP) in fiscal savings accumulated by the government. At the same time, a large fiscal expansion has widened the non-oil primary deficit from 52 to over 68 percent of non-oil GDP in the course of 2022.

“ An even bigger fiscal loosening envisaged in the draft 2023 budget law would widen the non-oil primary fiscal deficit further to 75 percent of non-oil GDP and bring the overall fiscal balance to a deficit of 6.5 percent of GDP. The combined effects of increased government spending, the exchange rate revaluation, and reduced oil production would bring the fiscal break-even oil price to $96 per barrel.

“ In the short run, implementation of the authorities’ fiscal plans could re-ignite inflation and FX market volatility. Over the medium term, continuation of current policies in the presence of substantial uncertainty about the future path of oil prices poses critical macroeconomic stability risks. Barring a large increase in oil prices, the current fiscal stance could lead to mounting deficits and intensifying financing pressures in the coming years.

“A significantly tighter fiscal policy is needed to strengthen resilience and reduce the government’s dependence on oil revenues while safeguarding critical social spending needs. Key priorities include diversifying fiscal revenues, reducing the oversized government wage bill, and reforming the pension system to make it financially sound and more inclusive. While supporting the government’s plan to increase social assistance, the mission recommends stronger targeting to ensure that it is directed to those who are most vulnerable.

“Improving public financial management remains of critical importance. In this context, the mission cautions against the planned establishment of new extrabudgetary funds, which raise governance and efficiency concerns, and strongly recommends adhering to on-budget government expenditures Furthermore, the mission urges full implementation of the framework for managing government guarantees, including Parliamentary approval and publication of an annual ceiling on and the list of government guarantees as part of the budget law. Accelerated efforts to establish a Treasury Single Account are also needed to strengthen public financial management.

“The mission welcomes the progress made by the CBI in improving its liquidity management and the AML/CFT frameworks and underscores the importance of close alignment of the stance of fiscal and monetary policies in managing the economy.

“Creating an enabling environment for private sector development will be of utmost importance for achieving durable and more inclusive growth. Priorities include continued efforts to enhance governance and reduce corruption, restructuring large state-owned banks to improve access to finance, reforming the labor market to promote private sector job creation, improving cost recovery in the electricity sector to enhance its ability to meet demand in a sustainable manner, and improving the broader business environment.

“The IMF staff team stands ready to support the authorities in their reform efforts and would like to thank them for candid and productive discussions during this mission.”

[screwball]

7 hours ago, Laid Back said:

“A significantly tighter fiscal policy is needed to strengthen resilience and reduce the government’s dependence on oil revenues while safeguarding critical social spending needs. Key priorities include diversifying fiscal revenues, reducing the oversized government wage bill, and reforming the pension system to make it financially sound and more inclusive.

hmmmmm....FML.....social security.....salary scales......can you see?

[yota691]

In detail.. The International Monetary Fund issues its report on the Iraqi economy and issues a number of warnings

 

money and business
   

A team of International Monetary Fund experts, led by Tukhir Mirzoev, warned that the fluctuations in the foreign exchange market and the reduction in oil production affected the momentum of growth in Iraq, warning of the expansionary plans of the Iraqi authorities in public finances that could lead to an exacerbation of the level of inflation. In the short term, and to impose significant risks to macroeconomic stability in the medium term.

 

And he considered, in a report issued by the Fund, that the discipline of public finances and wide-ranging structural reforms are crucial factors to reduce weaknesses in the Iraqi economy, to enhance its resilience in the face of crises, and to achieve sustainable and more inclusive growth for all.

The report comes after a visit to Amman, Jordan, during the period 24-31 May, with the aim of discussing the latest developments and economic prospects with the Iraqi authorities, as well as discussing plans related to policies in the coming period.

 

At the end of this mission, Mirzoev issued the following statement:

 

"The growth momentum of the Iraqi economy has slowed down in recent months. After recovering oil production last year and restoring the level it reached before the outbreak of the Corona pandemic, production is expected to contract by 5 percent in the year 2023 in light of the OPEC + decision to reduce the volume of oil production." , and the interruption of the Kirkuk-Ceyhan oil pipeline from work.

 

The fluctuations in the foreign exchange market rates, following the application of the Central Bank of Iraq to stricter controls to combat money laundering and terrorist financing on foreign currency sales, had a negative impact on the import-based non-oil sectors. A contraction in real non-oil GDP by 9 percent (on a year-on-year basis) during the last quarter of 2022, canceling the growth achieved during the first three quarters of the year.With signs of stabilization of the foreign exchange market, in light of the measures taken by the Central Bank of Iraq, the non-oil real GDP is expected to resume growth, reaching 3.7 percent in 2023. After the inflation rate rose to 7 percent in January On the second of January, inflation began to moderate in a way that reflects the decline in commodity prices at the international level and the increase in the exchange rate of the Iraqi dinar by 10 percent. The inflation rate is expected to average 5.6 percent during the year 2023.

 

"Favorable conditions in the oil market have supported Iraq's financial and external centers, but structural imbalances have continued to widen. In the year 2022, surpluses in public finance and external current account balances amounted to 7.6, or 17.3 percent of the total GDP, Respectively, due to the record rise in oil revenues, the foreign exchange reserves of the Central Bank of Iraq increased to reach 97 billion US dollars (equivalent to the value of 11 months of import), which includes financial savings for the government amounting to 16.3 billion US dollars ( At the same time, the significant expansion of public finances has increased the non-oil primary deficit from 52 percent to over 68 percent of non-oil GDP in 2022.

 

“The fiscal expansion will further increase, as proposed in the draft budget law for the year 2023, the size of the primary non-oil deficit in public finances to reach 75 percent of non-oil GDP, and the total deficit in the balance of public finances to 6 percent. 5 percent of GDP. The combined effects of the increase in government spending, the increase in the exchange rate of the Iraqi dinar, and the decrease in oil production combined would increase the price of a barrel of oil required to achieve balance (zero deficit) in public finances, to 96 US dollars.

 

"In the short term, the implementation of the Iraqi authorities' plans for public finances could push the inflation rate upward, and return the foreign exchange market to volatility. As for the medium term, the continuation of the current policies in light of a great deal of uncertainty about the path of Oil prices in the future pose serious risks to macroeconomic stability, and except in the case of a significant increase in oil prices, the current public finance situation could lead to an escalation of the deficit and an increase in fiscal pressures in the coming years.

 

A tighter fiscal policy is needed to strengthen the resilience of the economy and reduce the government's dependence on oil revenues while preserving urgent social spending needs. Key priorities include diversifying fiscal revenues, reducing the huge wage bill for government employees, and reforming the pension system To make it financially sound and more inclusive. While the IMF mission supports the government's plan to increase the volume of social assistance, it recommends a stronger level of targeting, to ensure that aid is directed to the most vulnerable citizens.

 

“Improving public financial management remains critical. In this context, the IMF mission warns of the need to be cautious about planned creation of new extra-budgetary funds, which raises concerns about governance and efficiency, and strongly recommends that all Government expenditures through the budget.

 

Furthermore, the mission is urging full implementation of the Government Guarantees Management Framework, including taking parliamentary pre-approval of the annual ceiling and the list of government guarantees as part of the budget law. In addition, there is a need to accelerate efforts to Establishing the single treasury account with the aim of strengthening public financial management.

The mission welcomes the progress made by the Central Bank of Iraq in the area of improving liquidity management, anti-money laundering and counter-terrorist financing frameworks, and stresses the importance of close coordination between the stances of monetary and public financial policies in managing the Iraqi economy.

 

“Creating an enabling environment for private sector development will be paramount to achieving sustainable and more inclusive growth. Priorities in this area include continued efforts to strengthen governance and reduce corruption, restructure large state-owned banks to improve access to finance, and reform the labor market with the aim of promoting job creation Employment in the private sector, improving the ability of the electricity sector to recover costs to enhance its ability to meet demand in a sustainable manner, and improving the broader business environment.

 

The Fund's team of experts stands ready to support the Iraqi authorities in their reform efforts, and would like to thank them for the frank and fruitful discussions during the mission.

 

 

 

---

Views 64

Added 06/01/2023 - 4:38 PM

[yota691]

The International Monetary Fund issues a pessimistic statement about the Iraqi economy

money and business
   

Economy News _ Baghdad
The International Monetary Fund issued a pessimistic statement for the Iraqi economy after the post-pandemic recovery last year, including reasons related to the interruption of the Kirkuk-Ceyhan oil pipeline and OPEC cuts.

A number of fund experts who met with Iraq in Jordan from May 24 to 31 last to discuss with the Iraqi authorities about recent economic developments and expectations as well as policy plans in the coming period, said that "the growth momentum of the Iraqi economy has slowed in recent months, after recovering to a level before Pandemic last year, oil production is set to contract by 5 percent in 2023 due to OPEC+ production cuts, Kirkuk-Ceyhan oil pipeline outage, foreign exchange market volatility in the wake of tightening AML/CFT controls by The Central Bank of Iraq on foreign currency sales negatively.

And they indicated, "It is estimated that the non-oil real GDP contracted by 9 percent (on an annual basis) in the last quarter of the year 2022, which cancels its growth during the previous three quarters, with the continued stability of the foreign exchange market, with the help of the measures of the Central Bank." In Iraq, non-oil real GDP growth is expected to resume and reach 3.7 percent in 2023, after rising to 7 percent in January,” and inflation has begun to moderate — reflecting a decline in international goods as well as a revaluation of 10 percent to the dinar - and it is expected that the average inflation will reach 5.6 percent in 2023.

The experts also pointed out that "favorable conditions in the oil market supported Iraq's financial and external situation, but the structural imbalances continued to widen. In the year 2022, current account surpluses in public and external finances reached 7.6 and 17.3 percent of GDP, respectively, on the back of revenues record high oil,” and the CBI’s foreign exchange reserves rose to US$97 billion (11 months of imports), including US$16.3 billion (6 percent of GDP) in fiscal savings accumulated by the government. At the same time, a significant fiscal expansion widened the non-oil primary deficit from 52% to more than 68% of non-oil GDP during the year 2022.

They pointed out that "the largest fiscal easing envisaged in the draft budget law of 2023 would widen the primary non-oil fiscal deficit to 75% of non-oil GDP and bring the total fiscal balance to a deficit of 6.5% of GDP, and the combined effects will lead to Increased government spending, a revaluation of the exchange rate, and lower oil production have pushed the fiscal breakeven price of oil to $96 a barrel.

Experts said, "In the short term, the implementation of the authorities' financial plans could lead to a re-ignition of inflation and fluctuations in the foreign exchange market, and in the medium term, the continuation of current policies in the presence of a great deal of uncertainty about the future course of oil prices poses critical risks to the stability of the economy." Aggregate, if there is no significant increase in oil prices, the current fiscal situation may lead to widening deficits and intensifying financing pressures in the coming years.

And they stressed that "a tougher fiscal policy is needed to enhance flexibility and reduce the government's dependence on oil revenues while protecting critical social spending needs." Government plan to increase social assistance, the mission recommends stronger targeting to ensure it is directed at the most vulnerable people.

They noted that "improving public financial management remains of paramount importance, and in this context, the mission warns against the planned creation of new extra-budgetary funds, which raises concerns about governance and efficiency, and strongly recommends adherence to budgeted government expenditures. Moreover, the mission urges "Full implementation of the Government Guarantees Management Framework, including Parliamentary Guarantees. Endorsement and publication of an annual cap and list of Government Guarantees as part of the Budget Law. Accelerated efforts are also needed to establish the Treasury Single Account to strengthen public financial management."

At the same time, the mission welcomed "the progress made by the Central Bank of Iraq in improving liquidity management and frameworks for combating money laundering and terrorist financing, and stresses the importance of close alignment of the position of fiscal and monetary policies in managing the economy."

 

 

---

Views 123

Added 06/01/2023 - 9:22 AM

[yota691]

International Monetary: The growth momentum in Iraq is slowing due to oil and currency

 

June 1, 2023

Baghdad / Obelisk Al-Hadath: The International Monetary Fund issued a statement about the prospects for the Iraqi economy for reasons related to the interruption of the Kirkuk-Ceyhan oil pipeline, in addition to the decline in oil production and fluctuations in the currency exchange rate.

And the International Monetary said in a statement received by Al-Masalla: The growth momentum of the Iraqi economy has slowed in recent months. After oil production recovered last year and restored to the level it reached before the outbreak of the Corona pandemic, oil production is expected to contract by 5 percent in the year 2023 in light of The decision of OPEC + to reduce the volume of oil production, and the interruption of the Kirkuk-Ceyhan oil pipeline from work,” according to a statement by International Monetary Fund experts who recently conducted a review of the Iraqi economy after their meeting with Iraqi officials in the Jordanian capital, Amman.

Iraq is the second largest oil producer in OPEC, with an average of 4.5 million barrels per day, of which about 3.4 million barrels are exported, as the Iraqi government relies on revenues from selling crude to cover about 95 percent of its expenditures.

The oil reserves in Iraq are the fifth largest proven oil reserves in the world, amounting to 145 billion barrels.

The IMF statement indicated that the fluctuations in the foreign exchange rates market, following the application of the Central Bank of Iraq to stricter controls to combat money laundering and terrorist financing on foreign currency sales, had a negative impact on the import-based non-oil sectors.

The IMF estimates that the non-oil real GDP contracted by 9 percent (on a comparative annual basis) during the last quarter of 2022, which canceled out the growth achieved during the first three quarters of the year.

With signs of stabilization of the foreign exchange market, in light of the measures taken by the Central Bank of Iraq, real non-oil GDP is expected to resume growth, reaching 3.7 percent in 2023, according to the International Monetary Fund statement.

The statement expected that the inflation rate would reach an average of 5.6 percent during 2023, indicating that inflation began to moderate after it rose to 7 percent last January.

The statement said: The favorable conditions in the oil market have supported the financial and external centers of Iraq, but the structural imbalances have continued to widen. In the year 2022, the surpluses of public finances and the external current account amounted to 7.6 and 17.3 percent of the total GDP, respectively, due to the record rise in oil revenues. The foreign currency reserves of the Central Bank of Iraq also rose to $97 billion (equivalent to the value of 11 months of imports), which includes financial savings for the government amounting to $16.3 billion (equivalent to 6 percent of GDP). At the same time, the significant fiscal expansion increased the non-oil primary deficit from 52 percent to over 68 percent of non-oil GDP in 2022.

He added that the fiscal expansion will further increase, as proposed in the draft budget law for the year 2023, the size of the primary non-oil deficit in public finances to reach 75 percent of non-oil GDP, and the total deficit in the balance of public finances to 6.5 percent. of the gross domestic product. The combined effects of increasing government spending, increasing the exchange rate of the Iraqi dinar, and reducing oil production combined would increase the price of a barrel of oil required to achieve balance (zero deficit) in public finances, to $96.

The statement indicated: In the short term, the implementation of the Iraqi authorities' plans for public finances could push the inflation rate to an escalation, and return the foreign exchange market to volatility. In the medium term, the continuation of current policies in light of a great deal of uncertainty about the future path of oil prices poses serious risks to macroeconomic stability. Barring a significant increase in oil prices, the current fiscal situation could lead to mounting deficits and tightening fiscal pressures in the coming years.

He also stressed that there is a need for a more tightened fiscal policy, in order to strengthen the resilience of the economy and reduce the government's dependence on oil revenues while preserving urgent social spending needs..as the main priorities include diversifying fiscal revenues, reducing the huge wage bill for government employees, and reforming The pension system to make it financially sound and more inclusive. Although the IMF mission supports the government's plan to increase the volume of social assistance, it recommends a stronger level of targeting, to ensure that aid is directed to the most vulnerable citizens.

[Officiallytook]

1 hour ago, yota691 said:

Favorable conditions in the oil market have supported Iraq's financial and external centers, but structural imbalances have continued to widen. In the year 2022, surpluses in public finance and external current account balances amounted to 7.6, or 17.3 percent of the total GDP, Respectively, due to the record rise in oil revenues, the foreign exchange reserves of the Central Bank of Iraq increased to reach 97 billion US dollars (equivalent to the value of 11 months of import), which includes financial savings for the government amounting to 16.3 billion US dollars ( At the same time, the significant expansion of public finances has increased the non-oil primary deficit from 52 percent to over 68 percent of non-oil GDP in 2022.

 

“The fiscal expansion will further increase, as proposed in the draft budget law for the year 2023, the size of the primary non-oil deficit in public finances to reach 75 percent of non-oil GDP, and the total deficit in the balance of public finances to 6 percent. 5 percent of GDP. The combined effects of the increase in government spending, the increase in the exchange rate of the Iraqi dinar, and the decrease in oil production combined would increase the price of a barrel of oil required to achieve balance (zero deficit) in public finances, to 96 US dollars.

 

"In the short term, the implementation of the Iraqi authorities' plans for public finances could push the inflation rate upward, and return the foreign exchange market to volatility. As for the medium term, the continuation of the current policies in light of a great deal of uncertainty about the path of Oil prices in the future pose serious risks to macroeconomic stability, and except in the case of a significant increase in oil prices, the current public finance situation could lead to an escalation of the deficit and an increase in fiscal pressures in the coming years

I like this look closer I see a push in here

[horsesoldier]

Foot slogging, sand bagging & kicking all the cans down the road. What the hell should be expected other than what we see here.

Just despicable & disgraceful. Wouldn't surprise me in the least if they dragged it all through the weeds for the rest of the year, then screaming we have a Crisis.

[Officiallytook]

If everyone focused on peace... Or the positives what would life give us... I feel you Soldier 🪖 but we have to stay focused on the brighter side of things to be blessed... Much love!

[horsesoldier]

7 hours ago, Officiallytook said:

If everyone focused on peace... Or the positives what would life give us... I feel you Soldier 🪖 but we have to stay focused on the brighter side of things to be blessed... Much love!

Certainly. I'm in it for the long haul. Just an observation with a bit of opinion as always.

After 20 years I get a might grumpy with all their foolish behavior 

[yota691]

International Monetary Government: Stop printing currency!

15 minutes ago

 

 

special |.. 

The financial and banking researcher, Mustafa Akram Hantoush, said today, Friday, that the concept of the International Monetary Fund's report on Iraq is summarized in two axes.

Hantoush confirmed to Al- Jarida that the currency printing policy must be stopped to cover liquidity and move towards a flexible monetary policy with banks without fines and stresses in order for the banks’ policy with citizens to be flexible and to be able to attract deposits in dinars and thus limit the printing process.

And between “the concept of the last warning, is the decrease in the inflation rate from 7% to 5.6% due to the 10% increase in the value of the Iraqi dinar, but in order to reach stability, other factors that cause inflation must be preserved.

[Jaygo]

2 minutes ago, yota691 said:

International Monetary Government: Stop printing currency!

15 minutes ago

 

 

special |.. 

The financial and banking researcher, Mustafa Akram Hantoush, said today, Friday, that the concept of the International Monetary Fund's report on Iraq is summarized in two axes.

Hantoush confirmed to Al- Jarida that the currency printing policy must be stopped to cover liquidity and move towards a flexible monetary policy with banks without fines and stresses in order for the banks’ policy with citizens to be flexible and to be able to attract deposits in dinars and thus limit the printing process.

And between “the concept of the last warning, is the decrease in the inflation rate from 7% to 5.6% due to the 10% increase in the value of the Iraqi dinar, but in order to reach stability, other factors that cause inflation must be preserved.

Hmmmmm…. 😁

[yota691]

The price of oil “threatens” the tripartite budget!

1 hour ago

Facebook Twitter LinkedIn Messenger

special |..

Economist Aziz Shwan said today, Friday, that in 2016, when global oil prices fell, the IMF agreed to support Iraq with a debt of $ 5.34 billion over 3 years.

Shwan told Al Jazeera that the aim of this loan was to support the government's economic reform program, ensure that the debt remains within tolerable limits, take measures to protect the poor, curb corruption, and enhance the stability of the financial sector.

He added, “The proposed budget is for three years, and it is very possible during the three years that the oil price will drop globally or other surprises will occur, especially as we live today in a politically and militarily charged world because of the war in Ukraine and the tensions between the West and China. These and other factors may affect global stability, oil prices, and international grain processing.

[yota691]

The Iraqi economy is entering a "complex crisis"

1 hour ago

 

Facebook Twitter LinkedIn Messenger

special |..

Economic journalist Salam Zaidan said today, Friday, that the International Monetary Fund is considered an advisory body to governments, including the Iraqi government, so it warns of the dangers of persisting in this large spending policy.

And Zaidan told the " newspaper ", that the Iraqi economy is unable to continue to increase spending, especially since there is a decline in the growth of non-oil revenues.

He added, “The Iraqi economy is entering a very complex crisis during a short period when oil prices fall below $50

[Officiallytook]

2 hours ago, horsesoldier said:

Certainly. I'm in it for the long haul. Just an observation with a bit of opinion as always.

After 20 years I get a might grumpy with all their foolish behavior 

You know we understand 😉 good days ahead! For sure, no pressure though Iraq LMFAO 

[Officiallytook]

And did I just see in red, if they increase the rate then it would curb inflation? What are they waiting for then lol

[horsesoldier]

21 minutes ago, Officiallytook said:

And did I just see in red, if they increase the rate then it would curb inflation? What are they waiting for then lol

Don't they have to form a committee then another committee to study what the 1st committee studied then make suggestions to whomever the hell else that may offer suggestions to ....oh God this could go on forever 🤣

[Officiallytook]

 it doesn't, I mean forever is a very long time, we may not see a RI/RV of any kind lol... I mean we'll see it, 😅 just won't be able to trade anything because we'll be lol

[jg1]

1 hour ago, horsesoldier said:

Don't they have to form a committee then another committee to study what the 1st committee studied then make suggestions to whomever the hell else that may offer suggestions to ....oh God this could go on forever 🤣

All those committees put people to work and help with the employment numbers. Just look at how well they economy is with all these new jobs. Blah blah blah.

[yota691]

Mazhar Saleh: The World Bank starts from the rentier of the Iraqi economy

Economical  06/03/2023

 

 

 Baghdad: morning

 

Yesterday, Friday, the financial advisor to the Prime Minister, Mazhar Muhammad Salih, commented on what was stated in the report of the International Monetary Fund experts, and what he described as very pessimistic.

 

Saleh told the Iraqi News Agency (INA): "The International Monetary Fund stems from the rentier problems of the Iraqi economy, as the proportion of public expenditures in the Iraqi economy reaches nearly 50% of the gross domestic product."

 

He added, "While the foreign reserves in which the Central Bank of Iraq defends stability are linked to the general level of prices as a major goal of monetary policy through the bank's intervention with its operational goals in controlling local liquidity levels and targeting growth in the money supply by using part of the foreign reserves whose source it is." Oil revenues are also in the general budget, as the monetary policy operations are embodied in the daily intervention in the exchange market with the strength and abundance of those reserves, the basis of which is the oil sector by 99%.

 

And he continued, “Thus, those important foreign reserves are dependent on imposing price stability on budget revenues from oil revenues themselves, so the correlation between monetary and fiscal policies depends in all cases on the development of the energy sector itself and the revenues achieved from high oil prices, and any fluctuations in the cycle of oil assets that affect In that important connection between the two policies, that is, fiscal and monetary.

 

And he added, “Therefore, the potential deficit in the oil current account of the balance of payments and because of the unilateralism of the economy will generate a deficit gap in the public budget, which is called the bilateral deficit, and affects the intervention capabilities of monetary policy in controlling liquidity levels to achieve price stability, and this matter requires monetary and fiscal policy.” Do two things together.

 

He explained, "The first factor includes the intervention of monetary policy in the money market to control local liquidity levels or the money supply by applying a more stringent policy in which this time the (interest rate) tool is used strongly in order to control the growth in the monetary base and then the general money supply, which are (sterilization) policies." Additional local liquidity, by using interest rate signals in addition to the exchange rate signal and the role of the foreign currency window.

 

And he indicated that "the second issue includes assuming fiscal policy imposing broader discipline on public expenditures, i.e. imposing financial discipline, as well as creating a development partnership with the private sector whose financial surpluses are concentrated to sustain spending on development and investment programs within the premise of the social market."

 

He noted that "the report of the International Monetary Fund experts was very pessimistic, as multilateral international financial organizations usually stick to a few geopolitical and environmental factors, even if they are temporary, and issues related to developments in the international economic situation, in order to give a very sad scenario for the future of the economy."

 

He stressed that "such situations such as water issues and desertification are often linked to food security risks on the one hand, and clean uses of energy, specifically renewable energy, are linked to issues related to the environment and carbon zeroing with the issue of low demand for oil and the deterioration of its revenues globally, as the sum of these warnings leads to an existential threat to the economy, according to reports issued." about these organizations.

 

He pointed out that, "Despite the foregoing, the country and its economic programs for the coming years, whether in the field of water or energy, and diversifying the economy, took all these factors into account, and it is a national planning responsibility to defend the interests of sustainable development in Iraq, and there is no way out of that."

[yota691]

The International Monetary Fund praises the policies of the Central Bank in supporting the national economy

 

Sameer Al-Nusairi

   

 

---

In light of the periodic review meetings of the International Monetary Fund experts who met with Iraq in Jordan in the last week of last May to discuss with the Iraqi side about recent economic developments and expectations as well as plans for fiscal and monetary policy in the coming period, and from an analysis of what was contained in the statement issued by the Fund, which refers to A slowdown in the growth of the Iraqi economy in recent months, after recovering to a level before the Corona pandemic last year, at the level of oil production and export, the main source of revenue, in addition to fluctuations in the foreign exchange market in the wake of tightening control over combating money laundering and terrorist financing by the Central Bank of Iraq. .

 

In addition, estimates of real non-oil GDP may have contracted by 9% (on an annual basis) in the last quarter of 2022, and expectations of the effects of a non-rise in oil prices in the event that they do not reach the price of $96 per barrel, which is the price required to achieve balance (zero deficit). In public finances, and to overcome the deficit in the 2023 budget, it will lead to Iraq and its investment plans entering the circle of embarrassment and risk, and will confuse the government’s economic reform programs. The planned budget deficit is expected to rise to more than 40% of GDP in 2023 when oil prices drop to $70 a barrel.

 

In addition, the delay in the issuance and approval of the 2023 budget after 5 months have passed since the current year. Certainly, the current economic situation, by relying heavily on oil and not drawing the required policies to activate non-oil productive sectors, will keep the Iraqi economy under an annual inflation rate of not less than 5.6% in In the best case, the general level of prices will continue within limits that are difficult to control, but despite the pessimistic view of the statement, the fund experts clearly indicated the progress made by the Central Bank in improving liquidity management and frameworks for combating money laundering and terrorist financing and its sound procedures in close alignment with the position of policies Financial and monetary management of the economy, and this confirms that the policies and initiatives that the Central Bank plans to launch within its next strategy will contribute significantly to overcoming failures and repercussions, supporting the national economy and enabling the government to implement its economic reform program.

 

And that the arrival of the foreign cash reserves of the Central Bank to the limits of 110 billion dollars, with the efforts made to maintain the continued stability of the currency exchange market, will contribute to reducing the inflation rate and maintaining a balanced level of prices. Online payment 

In banking and commercial dealings, he will support the government's plans for the desired economic reform.

---

Views 75

Added 06/03/2023 - 2:34 PM

[yota691]

International Monetary Fund: The Central Bank of Iraq has made progress in combating money laundering

International Monetary Fund logo

 

drains
   

Economy News - Baghdad
The International Monetary Fund praised the progress made by the Central Bank of Iraq in combating money laundering and terrorist financing.

 

"The IMF mission welcomes the progress made by the Central Bank of Iraq in the field of improving cash management, anti-money laundering and counter-terrorism financing frameworks," the fund said in a press statement, posted on its website and viewed by Al-Iqtisad News.

 

The fund confirmed that the mission stresses the importance of close coordination between the positions of monetary and public financial policies in managing the Iraqi economy.

 

---

Views 222

Added 06/03/2023 - 11:12 AM

[yota691]

Former parliamentarian: International Monetary Fund reports on the Iraqi economy are unrealistic

 

 

money and business
   

Economy News - Baghdad

The former Parliamentary Finance Committee rapporteur, Ahmed Al-Saffar, described most of the International Monetary Fund's reports on the Iraqi economy as "unrealistic", while considering the quality of the country's economy as "fragile".

Al-Saffar said, in an interview with the Iraqi Information Agency, which was seen by "Al-Iqtisad News", that "most of the International Monetary Fund's reports on the Iraqi economy are unrealistic," adding: "The figures that the International Monetary Fund report spoke about regarding the recovery of the Iraqi economy and its achievement of a growth rate of nearly 4 percent." - 5%, and the gross domestic product continues to increase, and these numbers are unrealistic.

He added, "Iraq does not have a real domestic product. Rather, the country's output is calculated on oil revenues, given that the Iraqi economy is rentier, meaning that we produce and export oil, and we obtain oil revenues in dollars and import the needs of the Iraqi society with it."

The former member of the Finance Committee explained, "This kind of economy is fragile and exposed to crises, and at any moment the oil sector is exposed to a shock," pointing out that "the issuance of these reports is unrealistic, because it does not rely on real data."

 

---

Views 13

Added 06/04/2023 - 5:15 PM

[yota691]

Parliamentary position on the International Fund paper..Will Iraq's economy be exposed to "shocks"?

• Today 16:46

Information / special.

Today, Sunday, the former Parliamentary Finance Committee rapporteur, Ahmed Al-Saffar, described most of the International Monetary Fund's reports on the Iraqi economy as "unrealistic," while considering the quality of the country's economy as "fragile."

 

Al-Saffar said, in an interview with Al-Maalouma Agency, that "most of the International Monetary Fund's reports on the Iraqi economy are unrealistic," adding: "The figures mentioned in the International Monetary Fund's report on the recovery of the Iraqi economy and its achievement of a growth rate of about 4-5 percent, and the output The gross domestic product continues to increase, and these numbers are unrealistic."

He added, "Iraq does not have a real domestic product. Rather, the country's output is calculated on oil revenues, given that the Iraqi economy is rentier, meaning that we produce and export oil, and we obtain oil revenues in dollars and import the needs of the Iraqi society with it."

The former member of the Finance Committee explained, "This kind of economy is fragile and exposed to crises, and at any moment the oil sector is exposed to a shock," pointing out that "the issuance of these reports is unrealistic, because it does not rely on real data."

The economist, Abd al-Rahman al-Mashhadani, counted the increase in inflation rates as "nature's concerns," while stressing the need to amend the salary bill.

The experts of the International Monetary Fund, who concluded their visit to Iraq, had presented an analytical paper on Iraq's economic policy, entitled "Where does the government finance?", and dealt with the implementation of the Iraqi authorities' plans for public finances, which could push the inflation rate to an escalation, And the foreign exchange market returns to volatility