After Al-Sadr withdrew .. “financial paralysis” in Iraq due to the “government formation crisis”

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[size=52]After Al-Sadr withdrew .. “financial paralysis” in Iraq due to the “government formation crisis”[/size]

[size=45]Warnings of Iraq remaining without a financial budget escalated due to the delay in forming the government, amid concern about the repercussions of the global food crisis, at a time when local food production fell below the level of demand with the increase in population inflation.[/size]
[size=45]The differences between the Iraqi political blocs, since the parliamentary elections on the tenth of last October, have prevented the formation of a new government, while Iraqi laws prevent the current government from disposing of oil sales funds as a "caretaker government."[/size]
[size=45]And the World Bank said in a report, Thursday, that “Iraq is gradually emerging from the deep recession that it experienced in 2020 due to the Corona virus pandemic and the accompanying collapse in oil prices, as after a contraction of more than 11% in 2020, the Iraqi economy achieved a growth rate of 2.8 percent in 2021, with the easing of restrictions imposed by the Corona pandemic on movement.”[/size]
[size=45]He added, "With the gradual cancellation of (OPEC +) production cuts, the oil GDP also began to grow in the second half of 2021, and the rise in oil revenues prompted a surplus in public financial balances and total external balances in Iraq in 2021. “.[/size]
[size=45]The report quoted the Regional Director of the Mashreq Department at the World Bank, Saroj Kumar Jah, as saying that “Iraq has a unique opportunity to carry out urgent and broad structural reforms through 3 means, which are to take advantage of the fiscal space resulting from its recent sudden oil revenues, and to redirect government spending towards programs that It works to improve growth and address the country’s human capital crisis.”[/size]
[size=45]The World Bank report confirms that “the current food security challenges in Iraq have intensified in the midst of the current rise in global commodity prices, while the level of domestic food production is less than the demand caused by rapid population growth, and severe droughts and other climate change factors have exacerbated This situation".[/size]
[size=45]The report believes that "the delay in forming the government and approving the 2022 budget will lead to limiting the use of the country's sudden oil revenues, as the actual ceilings of the 2021 budget have been reached, and the implementation of new investment projects will be suspended, which may reduce economic growth."[/size]
[size=45]The previous parliament was supposed to legislate the 2022 budget law, but the holding of early elections in October 2021, and the failure to form a new government after the parliamentary elections, prevented the legislation of the budget, which raised the concern of the popular circles, especially with the increasing size of the economic crisis in Iraq.[/size]
[size=45]This situation has caused delays in farmers’ entitlements, disruption of ration card coverage, suspension of investment projects that employ the workforce, as well as disruption of new projects that need to be included in the financial budget, while the current government remains with restricted powers to run daily affairs.[/size]
[size=45]financial paralysis[/size]
[size=45]The Iraqi Council of Ministers advisor, Mazhar Muhammad, believes that “the delay in approving the 2022 budget has led to a paralysis in the financial life, as the government is committed to a limited spending method without sufficient ability to deter economic problems and address them, which calls for the need to expedite access to “The delay in enacting the budget law led to a slowdown in the overall economic activity, including investment spending, which is necessarily included in the budget laws, up to side matters such as spending on some vulnerable groups such as social protection and caring for the poor, although the adoption of the Food Security Law focused on some of those Categories".[/size]
[size=45]The Iraqi parliament recently approved the Food Security Law, which is a mini financial budget that came to remedy the crisis of the delay in approving the budget, in light of the country's need for extensive spending to finance official departments, with exchange doors still waiting for the legislation in force.[/size]
[size=45]Economic researchers believe that Iraq needs a government with full powers to invest the financial abundance, and pump the largest amount of it into the markets to control the prices of goods and food, and move the investment wheel, especially since hundreds of projects still need cash payments to resume their work. A secure economic situation in line with the current situation.[/size]
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