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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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    The World Bank: In the absence of reforms, the gains of the oil boom in Iraq are liable to decline

    Rocky
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    • Post n°1

    The World Bank: In the absence of reforms, the gains of the oil boom in Iraq are liable to decline Empty The World Bank: In the absence of reforms, the gains of the oil boom in Iraq are liable to decline

    Post by Rocky Mon 31 Jul 2023, 3:59 pm

    [size=33]The World Bank: In the absence of reforms, the gains of the oil boom in Iraq are liable to decline
    It cannot continue to rely on oil revenues in the absence of a political commitment to implement reforms[/size]
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    Zagros Arabia - Erbil

    Jean-Christophe Carré, Regional Director of the Middle East Department at the World Bank, said that Iraq is witnessing a strong recovery after many years of turmoil, indicating that it cannot continue to rely on oil revenues in the absence of a high political commitment to adopting and implementing the necessary reforms that the country called for since long time.

    According to a report issued by the Central Bank today, Monday, "the Iraqi economy continues to recover, driven by the oil boom, after the severe recession caused by the Corona pandemic in 2020, while the non-oil sectors are still suffering from recession, and growth obstacles have appeared again."

    The “Spring and Summer 2023” edition of the Economic Observatory for Iraq report under the title “Pressures Reappear: Recovery in Iraq is at stake,” indicated that “real GDP growth has increased at an accelerated rate to 7% in 2022, driven by the boom in the oil sector.” , but it decreased to 2.6% on an annual basis in the first quarter of 2023.

    Favorable oil market dynamics in the first nine months of 2022 led to total reserves rising to a record high of $89 billion, but this trend slowed in early 2023, according to the report.

    Iraq's budget for the years 2023-2025, which was approved recently, indicates a significant expansionary trend in public finances that may lead to a rapid depletion of unexpected oil revenues, and thus to a return to pressure on public finances.

    The report concludes that "unless structural reforms are undertaken, Iraq's oil-based development model will suffer severely. Total GDP is expected to contract."

    He added, "The weak desire to carry out reforms, even in light of the decline in oil prices, will not help reduce the control of the public sector over the Iraqi economy, and increase the potential for non-oil growth and job creation, all of which would limit the prospects for economic growth in the long term."

    Greater risks loom on the Iraqi economy, largely represented by "unaddressed deep structural challenges that expose it severely to the risks of oil shocks, inflationary pressures, the growing effects of climate change, and increased volatility of commodity prices, which may exacerbate current trends towards poverty, and increase food insecurity," according to the report. 

    Carré stated that "Iraq is witnessing a strong recovery after many years of turmoil. However, it cannot continue to rely on unexpected oil revenues only for short-term recovery in the absence of a high political commitment to adopting and implementing the necessary reforms that it has called for for a long time."

    "It is necessary to take urgent measures to accelerate the diversification of economic activity, address existing factors that increase economic vulnerability, and address urgent climate-related challenges to secure the long-term well-being of the Iraqi people," he added. 

    The report also noted that "the lack of capital of the dominant state-owned banks, and the weakness of the private commercial banking sector, are among the obstacles that prevent the achievement of diversification of economic activity."

    The report stresses the importance of reforming the banking sector and promoting digital financial services in order to increase financial intermediation activities and enhance financial inclusion. These recommendations aim to transform the financial sector into a catalyst for the diversification of the economy. 

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