International Monetary: The recovery of oil prices will not protect the Iraqi economy from shocks

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[size=52]International Monetary: The recovery of oil prices will not protect the Iraqi economy from shocks[/size]

[size=45]Translated by: Hamed Ahmed[/size]
[size=45]The International Monetary Fund stated that the recovery of oil prices will not prevent the Iraqi economy from being subjected to shocks, expecting that the production rate during the current year will reach 4.6 million barrels per day, with inflation rates declining, stressing that the country still depends on oil to provide 90% of government expenditures.[/size]
[size=45]The International Monetary Fund stated in a report, translated by Al-Mada, that “the recovery in the Iraqi economy is the outcome of the support resulting from the rise in oil prices, but it is still vulnerable to shocks of market volatility.”[/size]
[size=45]The report added, “It is estimated that the gross domestic product will increase for the year 2022 by 8%, supported by a 12% growth in oil production, which reached an average of 4.4 million barrels per day.”[/size]
[size=45]And he expected, “Production will increase this year to an average of 4.6 million barrels per day, and to be at a rate of 4.7 million barrels per day in 2024, to reach 5 million barrels per day by 2027.”[/size]
[size=45]The report pointed out that "the rise in oil prices will achieve a surplus in the external and financial current account of Iraq, the second largest oil producer in OPEC."[/size]
[size=45]He also expected that “the actual growth rate of non-oil GDP will reach 4% during the year 2023, up from the growth rate of last year, which was around 3.2%, supported by the incentives of the emergency law measures for food security and development taken in the country, and will stabilize at 3.5% in the long run.” average.” The report talked about “an increase in the inflation rate by 4.5% during the year 2022, and it is expected to decline to 3.7 during this year, after which the inflation rate will decline further during the year 2024 at 2.5%.”[/size]
[size=45]He stressed, "The Iraqi economy has gone through a stage of gradual recovery, and this was supported by high oil revenues and appropriate policies, and that the aspirations for the near future are positive amid sudden oil profits." And the report added, "While the aspirations of the economy will rise in the near term, the dependence of this economy on oil will increase its vulnerability in the future to fluctuations in oil prices." And he continues, “According to the principle of gradually decreasing oil prices, the fiscal and external decrease in the medium term and financing pressures may return again, thus obstructing important reforms.”[/size]
[size=45]The report emphasized that "Iraq, which also has the twelfth proven gas reserve in the world, relies on oil to provide 90% of government expenditures."[/size]
[size=45]And he believed that “the Iraqi economy, despite this, is still fragile,” and he went on to say that “the absence of security and political instability continues to undermine private sector investments, putting pressure on Baghdad to maintain a social contract based on the government’s provision of jobs and goods at subsidized prices, which In turn, it depends entirely on oil revenues.[/size]
[size=45]He pointed out, "The rate of Iraq's oil exports in 2022 was around 3.6 million barrels per day, at an average price of $96.90 per barrel."[/size]
[size=45]The report suggested that “oil exports will increase this year to an average of 3.9 million barrels per day, and to reach 4 million barrels per day during the year 2024, at an average price ranging between $83.10 and $77.80, respectively.”[/size]
[size=45]And he added, "Oil prices had reached their peak in March 2022 as a result of the Russian military incursion into Ukraine, but they have declined by 38% over the past 12 months."[/size]
[size=45]The report stated, "The weakness of institutions and administration in Iraq has created a gap in its ability to properly use oil resources, as well as a weakness in the government's ability to provide adequate public services."[/size]
[size=45]He noted, "The presence of political polarization and popular resentment has also contributed to repeated episodes of political paralysis, and will make it difficult to carry out radical structural reforms in diversifying and modernizing the sources of the economy."[/size]
[size=45]The report pointed out that “the absence of meaningful reforms will be reflected in a decline in economic development and an increase in dependence on oil more, which is a matter of serious fluctuations in a world that is fighting climate change.”[/size]
[size=45]He urged the government to “accelerate efforts to reform public financial management systems, enhance non-oil revenues, and reduce the size of the excessive public sector.”[/size]
[size=45]The report added, "The authorities must strengthen the social protection network, improve the efficiency of the electricity sector, and reduce the rate of corruption."[/size]
[size=45]And the Iraqi Oil Minister, Hayan Abdul-Ghani, said in a statement, that “the Ministerial Committee to monitor production in “OPEC Plus” decided in its meeting that was held today (yesterday) to recommend keeping production levels unchanged.[/size]
[size=45]Abdel-Ghani added, "The agreement that was agreed upon last October 2022 provided for reducing the group's production by two million barrels per day, or about 2% of global demand, starting from last November, until the end of 2023."[/size]
[size=45]He pointed out, "This is in support of the oil market in facing economic and security challenges, as the rate of reducing Iraq's production amounted to 220,000 barrels."[/size]
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This is the article for which my reply was supposed to be.
I do believe this article depicts the true status of Iraq's condition; politically, financially, and socially.