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Established in 2006 as a Community of Reality

Welcome to the Neno's Place!

Neno's Place Established in 2006 as a Community of Reality


Neno

I can be reached by phone or text 8am-7pm cst 972-768-9772 or, once joining the board I can be reached by a (PM) Private Message.

Established in 2006 as a Community of Reality

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Established in 2006 as a Community of Reality

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    A global institution amends Iraq's credit rating after compensating for currency reserves

    Rocky
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    A global institution amends Iraq's credit rating after compensating for currency reserves Empty A global institution amends Iraq's credit rating after compensating for currency reserves

    Post by Rocky Thu Mar 25, 2021 8:47 am

    [size=52]A global institution amends Iraq's credit rating after compensating for currency reserves[/size]

    [size=45]Translated by Hamid Ahmed[/size]
    [size=45]Fitch Ratings has adjusted its position on the economy of Iraq in the long run with regard to the amount of issuance of hard currency bonds.[/size]
    [size=45]Fitch Foundation notes that the rating amendment reflects a lower decline in hard currency reserves than expected, and a higher material increase in oil prices, according to the Fitch Index chart in April 2020, according to which we attributed the expectation to be negative.[/size]
    [size=45]The International Foundation, which is based in New York, stated that decision-making in the country is still hampered by political and economic variables, although the devaluation of the Iraqi dinar by 18.5% vis-à-vis the dollar and the government's approval of the white economic and financial reform paper indicates that there are measures that will put in place Financial Iraq is on more stable steps.[/size]
    [size=45]Iraq's classification is restricted by the limits of its reliance on exported goods and weak management, as well as high political concerns and an underdeveloped banking sector, in that the classification is backed by high foreign currency reserves and cost little interest on government debt.[/size]
    [size=45]The Fitch Foundation indicated that it expects the budget deficit to be equal to 5% of GDP for 2021, i.e. a drop from an expected deficit of 16.5% of GDP for 2020 due to higher oil prices and the devaluation of the currency, which will enhance the value of the local currency from oil exports. By 5% of the gross domestic product. There is a lot of confusion in the forecast because the 2021 budget has not yet been finalized amid widely differing proposals.[/size]
    [size=45]In 2022, the global corporation expected a similar deficit, as higher oil exports would offset a drop in the oil price, while spending would increase only marginally after strong growth in 2021.[/size]
    [size=45]In 2020, the Ministry of Finance relied on indirect cash financing of 14% of the GDP from the Central Bank (equivalent to 27 trillion Iraqi dinars) to fill the deficit, net financing from hard currency was negative. Taking into account the weakness and underdevelopment of the banking sector and with the domestic debt market, it is expected to resort to other funds from the central bank if external financing continues to diminish.[/size]
    [size=45]Fitch International expects a strong increase in the rate of spending in 2021, or by 28%, to reach 113 trillion dinars, comparing to the 2019 spending rates set by the Ministry of Finance. The list of salaries and retirement benefits will expand further, based on pledges made by the previous government, while we expect a recovery in other spending lines following the financing restrictions for 2020, including capital spending.[/size]
    [size=45]The global corporation also expects a decrease in government debt from the GDP for 2021 to 74% before gradually increasing about 80% in the medium term, given the adjustment in oil prices and an increase in oil production to 4.6 million barrels per day and an increase in the export rate to 3.45 million barrels per day by the year 2024.[/size]
    [size=45]Hard currency reserves remain steady at $ 54 billion, despite a decrease of $ 14 billion in 2020.[/size]
    [size=45]Fitch expects the stability of reserves for 2021 with the rise in oil prices and that the devaluation will reduce the current account deficit by 1.5% of GDP compared to the previous deficit for 2020, which was 12.5% ​​of GDP. However, we expect reserves to decline in 2022 to $ 48 billion, as the gap between lower oil prices and higher imports will widen.[/size]
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