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In light of the periodic review meetings of the International Monetary Fund experts who met with Iraq in Jordan in the last week of last May to discuss with the Iraqi side about recent economic developments and expectations as well as plans for fiscal and monetary policy in the coming period, and from an analysis of what was contained in the statement issued by the Fund, which refers to A slowdown in the growth of the Iraqi economy in recent months, after recovering to a level before the Corona pandemic last year, at the level of oil production and export, the main source of revenue, in addition to fluctuations in the foreign exchange market in the wake of tightening control over combating money laundering and terrorist financing by the Central Bank of Iraq. .
In addition, estimates of real non-oil GDP may have contracted by 9% (on an annual basis) in the last quarter of 2022, and expectations of the effects of a non-rise in oil prices in the event that they do not reach the price of $96 per barrel, which is the price required to achieve balance (zero deficit). In public finances, and to overcome the deficit in the 2023 budget, it will lead to Iraq and its investment plans entering the circle of embarrassment and risk, and will confuse the government’s economic reform programs. The planned budget deficit is expected to rise to more than 40% of GDP in 2023 when oil prices drop to $70 a barrel.
In addition to that, the delay in the issuance and approval of the 2023 budget after 5 months have passed since the current year. Certainly, the current economic situation, by relying heavily on oil and not drawing the required policies to activate non-oil productive sectors, will keep the Iraqi economy under an annual inflation rate of not less than 5.6% in In the best case, the general level of prices will continue within limits that are difficult to control, but despite the pessimistic view of the statement, the fund experts clearly indicated the progress made by the Central Bank in improving liquidity management and frameworks for combating money laundering and terrorist financing and its sound procedures in close alignment with the policy stance Financial and monetary management of the economy, and this confirms that the policies and initiatives that the Central Bank plans to launch within its next strategy will contribute significantly to overcoming failures and repercussions, supporting the national economy and enabling the government to implement its economic reform program.
And that the arrival of the foreign cash reserves of the Central Bank to the limits of 110 billion dollars, with the efforts made to maintain the continued stability of the currency exchange market, will contribute to reducing the inflation rate and maintaining a balanced level of prices. Online payment
In banking and commercial dealings, he will support the government's plans for the desired economic reform.
Added 06/03/2023 - 2:34 PM
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