Iraq : 2017 Article IV Consultation and Second Review under the Three-Year Stand-by Arrangement-and

Iraq : 2017 Article IV Consultation and Second Review under the Three-Year Stand-by Arrangement-and Requests for Waivers of Nonobservance and Applicability of Performance Criteria, and Modification of Performance Criteria-Press Release; Staff Report; and Statement by the Executive Director for Iraq


In the context of the 2017 Article IV Consultation and Second Review under the Three-Year Stand-by
Arrangement with Iraq, the following documents have been released and are included in this package:
• A Press Release including a statement by the Chair of the Executive Board and summarizing the
views of the Executive Board as expressed during its August 1, 2017 consideration.
• The Staff Report prepared by a staff team of the IMF for the Executive Board’s consideration on
August 1, 2017, following discussions that ended on June 4, 2017, with the officials of Iraq on
economic developments and policies. Based on information available at the time of these
discussions, the staff report was completed on July 25, 2017.
• An Informational Annex prepared by the IMF staff.
• A Statement by the Executive Director for Iraq.
The documents listed below have been or will be separately released.
Letter of Intent sent to the IMF by the authorities of Iraq*
Memorandum on Economic and Financial Policies by the authorities of Iraq*
Technical Memorandum of Understanding*
*Also included in Staff Report
Selected Issues
The IMF’s transparency policy allows for the deletion of market-sensitive information and premature
disclosure of the authorities’ policy intentions in published staff reports and other documents.


IMF Executive Board Completes Second Review of Iraq’s Stand-By Arrangement and
the 2017 Article IV Consultation
 The authorities are appropriately maintaining the peg of the Iraqi dinar to the U.S. dollar,
which provides a key anchor to the economy.
 Measures to prevent money-laundering, counter the financing of terrorism, and
strengthen the anti-corruption legislation need to be implemented.
 The authorities are implementing a sizable fiscal adjustment, mostly through
retrenchment of inefficient capital expenditure while protecting social spending.
The Executive Board of the International Monetary Fund (IMF) today completed the second
review of Iraq’s three-year Stand-By Arrangement (SBA), which is designed to support
Iraq’s economic reform program and restore fiscal balance over the medium term. The
completion of the second review allows the authorities to draw the equivalent of
SDR 584.2 million (about US$ 824.8 million), bringing total disbursements to
SDR 1494.2 million about US$ 2109.7 million. The SDR 3.831 billion arrangement (about
US$5.34 billion at the time of approval of the arrangement) was approved in July, 2016 (See
Press Release No. 16/321) and the first review was completed on December 5, 2016 (See
Press Release No. 16/540).
As part of the completion of the second review, the Board also approved Iraq’s request for
waivers of non-observance and applicability of performance criteria, and modification of
performance criteria. Further fiscal consolidation was achieved in 2016, but at a slower pace
than programmed because of weak control of investment expenditure and humanitarian
needs. To move the program forward, the authorities are implementing strong corrective
measures as prior actions and are committed to further fiscal measures in 2018 to ensure
external and debt sustainability.
The Executive Board today also concluded the 2017 Article IV Consultation with Iraq. A
respective press release will be issued separately.
Following the Executive Board’s decision, Mr David Lipton, First Deputy Managing
Director, issued the following statement:
International Monetary Fund
Washington, D.C. 20431 USA
The economic policies implemented by the Iraqi authorities to deal with the shocks facing
Iraq—the armed conflict with ISIS and the ensuing humanitarian crisis and the collapse in oil
prices—are appropriate. In the fiscal area, the authorities are implementing a sizable fiscal
adjustment, mostly through retrenchment of inefficient capital expenditure while protecting
social spending. The authorities are appropriately maintaining the peg of the Iraqi dinar to the
U.S. dollar, which provides a key anchor to the economy. Performance under the Stand-By
Arrangement has been weak in some key areas, but understandings have been reached on
sufficient corrective actions to keep the program on track. Resolute implementation of the
authorities’ program, together with strong international financial support, will be key.
Further fiscal consolidation measures are needed in 2017-18 to keep the program on track.
The composition of the fiscal adjustment should be improved over time by increasing non-oil
revenue and reducing current expenditure. In addition, reforming the electricity sector and
state-owned enterprises will make room for larger and more effective investment expenditure
that supports growth and job creation.
Significantly improving public financial management will be important. Arrears need to be
assessed and paid following verification, and expenditure commitment and cash management
should be strengthened to prevent the accumulation of new arrears.
Measures to bolster financial sector stability include strengthening the legal framework of the
Central Bank of Iraq, restructuring state-owned banks, and eliminating an exchange
restriction and a multi-currency practice. Measures to prevent money-laundering, counter the
financing of terrorism, and strengthen the anti-corruption legislation also need to be
implemented.
Implementation of the budget-sharing agreement with the Kurdistan Regional Government
would put both the federal government and the Kurdistan Regional Government in a better
position to address the shocks to the Iraqi economy.


........

[You must be registered and logged in to see this link.]

[You must be registered and logged in to see this link.]

Iraq : 2017 Article IV Consultation and Second Review under the Three-Year Stand-by Arrangement-and Requests for Waivers of Nonobservance and Applicability of Performance Criteria, and Modification of Performance Criteria-Press Release; Staff Report; and Statement by the Executive Director for Iraq

Author/Editor:International Monetary Fund. Middle East and Central Asia Dept. Publication Date: August 9, 2017 Electronic Access:Free Full text (PDF file size is 2405 KB).Use the free Adobe Acrobat Reader to view this PDF file

Summary:Iraq is an oil-dependent and state-dominated fragile economy that has been hit hard by the conflict with ISIS and the fall in oil prices. The conflict has hurt the economy through displacement and impoverishment of millions of people, and destruction of infrastructure and assets. The oil price decline has resulted in a massive reduction in budget revenue, pushing the fiscal deficit to an unsustainable level. The authorities are responding to the crisis with ambitious but necessary fiscal adjustment while maintaining their commitment to the exchange rate peg, which provides a key nominal anchor in a highly uncertain environment.

Series: Country Report No. 17/251
ENGLISH
Publication Date: August 9, 2017 ISBN/ISSN:9781484314944/1934-7685Stock No:1IRQEA2017001Price: $18.00 (Academic Rate:$18.00) Format:PaperPages:132
Please address any questions about this title to [You must be registered and logged in to see this link.]

FOLLOW LINK FOR PDF:

[You must be registered and logged in to see this link.]

Blah blah blah blah blah..so tired if hearing what needs to be done..still don't understand why tal afar hasn't bee no started, ground troops..but thanks for the articles.. In f they would only ACT

We might be surprised tmills

Or a bad surprise