Officials: The Iraqi financial crisis may make us borrow from the International Monetary Fund again
[You must be registered and logged in to see this image.] |
Economy News - Baghdad
Between the fall in crude prices and political volatility, the shrinking international intentions to save it and the new Corona epidemic, Iraq stands on the brink of a financial catastrophe that could push it into austerity measures and re-renew popular anti-government protests .
But officials seem strangely optimistic, which experts describe as a "denial" given that an expected collapse in oil prices will cost Iraq two-thirds of its net income this year .
Brent crude prices fell this week to $ 26 per barrel, the lowest level since 2003, in the wake of global oil demand affected by the outbreak of the Corona virus, and the price war between major producers Saudi Arabia and Russia .
In contrast, the head of the International Energy Agency, Fatih Birol, says that Iraq, whose oil revenues constitute more than 90 percent of its revenues, will face "enormous economic pressures ."
Iraq is the second largest oil producer in the "OPEC", and usually exports 3.5 million barrels per day .
Iraq adopted in its draft budget for 2020 on an expected price of $ 56 a barrel. And with lower prices, Iraq’s net income will decrease by 65 percent this year, compared to last year, causing a monthly deficit of $ 4 billion dedicated solely to paying salaries and maintaining government business continuity .
Birol points out that "in the current crisis, Iraq will suffer to exceed oil revenues of $ 2.5 billion per month," calling on officials to find "urgent solutions." This prediction is based on the price of $ 30 a barrel before the recent decline .
Ways to reduce costs
On the other hand, senior Iraqi officials say to Agence France-Presse that the ministries of finance and oil, the Iraqi Central Bank and state-owned banks are looking at ways to cut costs and find financing .
The Governor of the Central Bank of Iraq, Ali Al-Alaq, explains to the agency that "there is some concern, but it is not severe ."
"I think oil prices at this level will not last long. We don't expect big spikes, but at the level that secures the required volume, " he says.
Al-Alaq believes that officials are still closely reviewing the draft 2020 budget, which is one of the largest budgets of Iraq at around 137 billion dollars .
Over 75 percent of it is earmarked for salaries and other costs, with the remainder being spent on capital investments .
Total salaries jumped from $ 36 billion in 2019 to $ 47 billion this year, after 500,000 new employees were hired to appease the rising street for months .
The government employs about four million Iraqis, pays three million of them, and welfare for a million employees .
The relationship explains that "based on our preliminary indicators, we will be able to cover external debt and salaries", and reduce the benefits and services that "lack economic efficiency ".
But eliminating any benefits in a time of global economic downturn could put people back on the streets with even greater momentum .
He points out that other options include recovering "trillions" of the Iraqi dinar from accounts in state-owned banks, as the ministries have stored years of surplus funds, issuing bonds to people and rescheduling internal debt payments .
The central bank governor added that new talks are also underway with the International Monetary Fund, but with the absence of a budget and the formation of a new government, it appears that it will not bear fruit .
The government does not plan to devalue the currency, obtain new foreign loans, or stop payments to international oil companies, which are worth $ 1 billion a month .
Al-Alaq was optimistic that the pressures would push the government to introduce long-awaited financial reforms, saying that "a blow that does not break your back will strengthen you ."
Not optimistic
On the other hand, some officials openly admit that they do not share the optimism of the relationship .
A senior Iraqi adviser describes the situation as a "serious crisis", while another says that it will be impossible to reduce the budget in a country that TI ranked 16th on the list of the most corrupt countries in the world .
"Some ministers oppose cuts because it will penetrate their patronage networks," the chancellor says .
He adds that the government assumes that oil prices will return to normal within two months, which the International Energy Agency did not expect .
In a related context, Ahmed al-Tabaqshali of the Iraq-based Institute for Regional and International Studies notes, "Putting the head in the sand is not politics ."
Although Iraq faced a collapse in prices in 2014 and 2016, it did not witness the current significant decline in global demand, especially from China affected by the Corona virus, the main importer of Iraq .
Reliance on the international community is less permanent than it was in 2014, when world powers were eager to help Iraq fight ISIS .
Tabkashli says that Iraq may have to resort to reserves worth about $ 60 billion to cover the deficit, but it will inevitably have to reduce salaries and perhaps borrow internationally .
Even if the markets eventually stabilize, Iraqi oil will struggle to compete with the abundant Saudi product .
So Tabaqli considers that "there are painful adjustments that we need to make now, not leave them to our grandchildren."
[You must be registered and logged in to see this link.]
Today at 9:38 am by Rocky
» A leader in the National Bank: We are committed to the federal decision and to postpone the election
Today at 9:28 am by Rocky
» Al-Hakim: Iraq's future cannot be mortgaged to volatile oil prices
Today at 9:24 am by Rocky
» The conflict of the corridors: the path to development from a historical perspective and the door to
Today at 9:22 am by Rocky
» The Kurdistan Region demands that the federal government spend 1.1 billion dinars.. What is the reas
Today at 9:21 am by Rocky
» Tomorrow, Iraq is preparing to launch a complementary round of gas licensing
Today at 9:19 am by Rocky
» A government move to restore the funds of the Trade Bank of Iraq
Today at 9:17 am by Rocky
» The Central Bank informs France of plans to restructure the banking sector
Today at 9:15 am by Rocky
» A government advisor reveals the fate of the budget tables
Today at 9:13 am by Rocky
» Iranian mediation between Baghdad and Erbil... Revealing the most prominent files of Raisi’s visit t
Today at 9:10 am by Rocky
» Reconstruction and development is a priority.. A parliamentary committee follows up and monitors gov
Today at 9:08 am by Rocky
» Al-Hakim comments on the agreements concluded with Türkiye and confirms: Iraq is on the right path
Today at 9:06 am by Rocky
» Tomorrow... Iraq takes a step that will give it gas equivalent to 200% of imported Iranian gas
Today at 9:04 am by Rocky
» A long and disturbing message.. The Iraqi government “blames” the United Nations because of “other p
Today at 9:00 am by Rocky
» The Governor of the Central Bank and the French Ambassador discuss developments in the banking secto
Today at 5:18 am by Rocky
» Al-Bajari: Iraqi companies will have a great opportunity to work after opening the door to investmen
Today at 5:16 am by Rocky
» Transparency: Imports from Sulaymaniyah and Halabja during the past week amounted to more than 10 bi
Today at 5:13 am by Rocky
» Al-Sudani: The delayed projects left great damage to the level of services in Babylon
Today at 5:12 am by Rocky
» Economist: The fluctuation of the dollar is “the balance of speculators”
Today at 5:10 am by Rocky
» {Al-Furat News} publishes the text of Al-Sudani’s request to Guterres to end UNAMI’s work in Iraq
Today at 5:08 am by Rocky
» A former MP accuses Türkiye of transferring its conflict with the workers to Iraq
Today at 5:05 am by Rocky
» A call to the Sudanese to remove American forces from Iraq
Today at 5:03 am by Rocky
» Oil Parliament: Ankara holds Erbil responsible for the oil fines it owes
Today at 5:02 am by Rocky
» The government is silent...the reality of removing American forces from Iraq
Today at 5:01 am by Rocky
» The radiation protection law in the first session of the next legislative term
Today at 5:00 am by Rocky
» A Spanish company raises controversy and a representative reveals a parliamentary movement against i
Today at 4:59 am by Rocky
» Sudanese officially requests the end of the United Nations mission in Iraq / documents
Today at 4:58 am by Rocky
» Because its sessions were not held, the Kirkuk Council faces a judicial complaint, and its members d
Today at 4:56 am by Rocky
» Former US Chief of Staff: We slaughtered huge numbers of innocent people in Iraq and other countries
Today at 4:55 am by Rocky
» The Association of Private Banks counts the percentage of shares traded on the stock market during a
Today at 4:53 am by Rocky
» The European Union and Iraq agree to increase cooperation between them
Today at 4:52 am by Rocky
» American Bank: Expectations to increase Iraq’s oil capacity in 2025
Today at 4:50 am by Rocky
» Central Bank Governor to the French Ambassador: The plan to restructure government banks will change
Today at 4:48 am by Rocky
» Integrity confirms working to conclude a memorandum of understanding with the Kuwaiti Anti-Corruptio
Today at 4:47 am by Rocky
» Highlights of the Prime Minister's visit to Babylon
Today at 4:46 am by Rocky
» The Minister of Transport discusses with a Turkish delegation the latest developments in the develop
Today at 4:44 am by Rocky
» Free of charge.. Issuing approximately 13 thousand unified cards for those covered by social protect
Today at 4:42 am by Rocky
» A parliamentary committee advises the government to deter trespassers: Slums are one of the reasons
Today at 4:41 am by Rocky
» Embassy Protection confirms to “Baghdad Today”: The missions are safe and we have taken proactive me
Today at 4:38 am by Rocky
» Water resources resolve the controversy of the “Wadi Al-Tea” project.. It will nourish the Hamrin ic
Today at 4:37 am by Rocky
» After approving the National Security Strategy...a parliamentary movement to host “responsible” figu
Today at 4:36 am by Rocky
» Al-Hakim calls for the distribution of plots of land to the families of the martyrs of the Popular M
Today at 4:34 am by Rocky
» Order 160 Committee completes the “port scandals” papers... and searches for a legal outlet for impl
Today at 4:33 am by Rocky
» It revealed the details of its contract with four companies to complete the census requirements... P
Today at 4:31 am by Rocky
» Egypt, Morocco and Qatar praise the Iraqi Integrity proposal to establish the Arab Law Enforcement C
Today at 4:30 am by Rocky
» The Iraqi Parliament enters its legislative recess and requires holding an “extraordinary” session o
Today at 4:28 am by Rocky
» The Sudanese has not rested since the morning.. He carried out 12 activities and allocated a trillio
Today at 4:27 am by Rocky
» Blinken's agent: Erbil is a strategic ally of Washington in a 360-degree relationship
Today at 4:25 am by Rocky
» Oil seeks to convert refinery products to “Euro 5”... high quality and environmentally friendly
Today at 4:24 am by Rocky
» A leader in the framework: There is no need for early elections...the “legislative” elections will t
Today at 4:23 am by Rocky
» Parliament decides to extend its legislative term by 30 days
Today at 4:22 am by Rocky
» Iraq has the tenth worst economic growth in the world during the last 5 years
Today at 4:19 am by Rocky
» Al-Hakim: The future cannot be mortgaged to volatile oil prices
Today at 4:17 am by Rocky
» It will change the reality of Iraqi banks.. Al-Alaq reveals a plan that enjoys Sudanese support
Today at 4:15 am by Rocky
» MM&C 5/9/24 The Federation of Chambers of Commerce and the European Union discuss cooperation to fin
Yesterday at 9:27 am by Rocky
» MM&C 5/9/24 Customs, security and economic aspects
Yesterday at 9:24 am by Rocky
» Union of Arab Banks: Iraq's environment encourages investment
Yesterday at 6:57 am by Rocky
» Government advisor: Movement to recover bad debts for the benefit of the Iraqi Trade Bank
Yesterday at 6:55 am by Rocky
» The International Development Bank announces the opening of its new branch in Erbil
Yesterday at 6:52 am by Rocky
» Oil seeks to convert refinery products to “Euro 5”... high quality and environmentally friendly
Yesterday at 6:50 am by Rocky
» Budget delay: the cry for help for paralyzed services and disrupted dreams
Yesterday at 6:47 am by Rocky
» Oil: Completion of projects to improve the quality of petroleum products, and others are under imple
Yesterday at 6:44 am by Rocky
» Chairman of the Securities Commission: 3 million shares, average daily trading volume
Yesterday at 6:43 am by Rocky
» Tamim calls on the countries participating in the meetings of the Arab Administrative Development Or
Yesterday at 6:41 am by Rocky
» Parliamentary Endowments: 39 thousand pilgrims, Iraq’s share, and waiving the religious obligation i
Yesterday at 6:39 am by Rocky
» Washington refers to Iraqi legislation that “does not harm” his international presence, and Baghdad
Yesterday at 6:34 am by Rocky
» Deputy: Extending the legislative term depends on sending the budget schedules
Yesterday at 6:30 am by Rocky
» Parliamentary Legal: 88 draft laws on the parliamentary shelf
Yesterday at 6:29 am by Rocky
» The head of the movement denies any Iraqi-American negotiations to remove the coalition
Yesterday at 5:23 am by Rocky
» A deputy expects to resolve the issue of electing the Speaker of Parliament next week
Yesterday at 5:22 am by Rocky
» Obtaining the approval of the Minister of Electricity to fill the energy shortage in Dhi Qar
Yesterday at 5:21 am by Rocky
» Economist on the decline in dollar prices: My time and it will not reach its official price
Yesterday at 5:20 am by Rocky
» The Iraqi Ministerial Council for National Security approves the 2024-2028 strategy
Yesterday at 5:18 am by Rocky
» Mulla Bakhtiar: Nechirvan Barzani's visit to Iran melted the ice between Erbil and Tehran
Yesterday at 5:17 am by Rocky
» Password "78"... Why did the Sudanese government's interrogations and noisy sessions decline?
Yesterday at 5:16 am by Rocky
» JP Morgan forecasts an increase in the oil capacity of Iraq and other countries in 2025
Yesterday at 5:15 am by Rocky
» Turkish Minister of Transport: The development road will cost $20 billion
Yesterday at 5:13 am by Rocky
» The Supreme Committee for Reconstruction and Investment approves a package of strategic projects
Yesterday at 5:12 am by Rocky
» Work: Preparing a unified national strategy to create job opportunities for youth
Yesterday at 5:11 am by Rocky
» The Prime Minister's financial advisor reduces the risks of the budget deficit
Yesterday at 5:10 am by Rocky
» Sudanese announces the signing of an agreement with Japan to finance small and medium enterprises in
Yesterday at 5:09 am by Rocky
» Government Advisor: The Securities Commission represents the governance base for promoting financial
Yesterday at 5:08 am by Rocky
» A unified national strategy to create job opportunities for youth
Yesterday at 5:07 am by Rocky
» A one-week deadline to decide the position of Speaker of Parliament
Yesterday at 5:06 am by Rocky
» Parliament: We coordinate with the competent regulatory authorities to examine medicines
Yesterday at 5:04 am by Rocky
» The Commission suspends the Kurdistan Parliament's voting procedures
Yesterday at 5:03 am by Rocky
» $100 million to localize the pharmaceutical industry
Yesterday at 5:01 am by Rocky
» Increase in external remittances at the Central Bank
Yesterday at 5:00 am by Rocky
» A government advisor reduces the risks of a budget deficit
Yesterday at 4:54 am by Rocky
» Culture: We seek to invest in the stability of the country to advance the tourism sector
Yesterday at 4:53 am by Rocky
» Integrity announces the results of a questionnaire on bribery in real estate registration department
Yesterday at 4:50 am by Rocky
» Parliament comments on Sudanese plan to restructure the government apparatus: It needs radical refor
Yesterday at 4:49 am by Rocky
» The dollar rises again against the Iraqi dinar in Baghdad
Yesterday at 4:45 am by Rocky
» Politician: The government does not deal transparently with the issue of expelling the Americans
Yesterday at 4:43 am by Rocky
» A government bank participating in an accounting project
Yesterday at 4:42 am by Rocky
» Masrour Barzani: The Kurdistan Regional Government has implemented all its obligations and duties
Yesterday at 4:41 am by Rocky
» French Consul: France strengthens relations with the Kurdistan Region
Yesterday at 4:39 am by Rocky
» Studies Center: Sudanese faces the challenges of maintaining sustainable relations with the United S
Yesterday at 4:38 am by Rocky
» “The absence of democracy is not possible.” The federal government remains silent on the postponemen
Yesterday at 4:37 am by Rocky