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Economy News - Baghdad
Today, Wednesday, the Advisor to the Prime Minister for Financial Affairs, Mazhar Muhammad Salih, considered the World Bank's estimate of Iraq's debts at more than 150 billion dollars exaggerated and unreal, and while confirming the high creditworthiness of Iraq, he indicated that no failure was recorded in the timing of debt repayment in more than a decade. from time.
Saleh said, "The issue of Iraqi public debt requires a professional differentiation of its history and details, and not taking its numbers on their own without a clear logical analysis. The internal public debt, which is approximately 71 trillion dinars, and which the government banking system still retains possession of those debts in the form of government bonds and treasury transfers, is estimated at Its evaluation in foreign currency is approximately $54 billion, while the external debt payable until the year 2028 is estimated at about $23 billion, and there are debts due after the year 2028, so the external debt becomes about $30 billion.
He added, "There is a debt pending on the Paris Club agreement of 2004, i.e. sovereign debts prior to 1990 belonging to four Gulf countries and four other countries, and it is about $40 billion, and if it is activated, if it is correct (because it is, as it is termed economically, reprehensible debts because it financed the Iraqi-Iranian war." At that time, if it is correct again, it must be deducted by 80% or more under the Paris Club agreement for the year 2004, to be less than $ 9 billion or less.
And Saleh continued, commenting on what the World Bank mentioned in a new report that Iraq's debt exceeds 150 billion dollars, saying, "We do not know the method of calculating the debt in the World Bank report. Aside from it, for the external debt to reach 50 billion dollars, as an expectation of the total internal public debt early, which was not achieved, and therefore the reading of Iraq’s internal and external debts, according to what was published by the World Bank, came to be about 152 billion dollars, and this is exaggerated rather than being About 84 billion dollars (excluding the balance attached to the Paris Club agreement as an abhorrent debt) and what has been published about debt balances is unreal and discretionary.
He pointed out, "However, the ratio of public debt to GDP, even in light of its unjustified inflation, will remain between 54-57% of the estimated GDP for the year 2023, and it is within the current safe economic stability area, which is usually estimated at about 60%."
And the advisor to the Prime Minister for Financial Affairs warned, "The financial policy in Iraq adopts a highly disciplined system in adjusting the timing of payment of debt dues (annual installments and interest) or when extinguishing the debt once on its annual due dates, and there are fixed and accurately estimated annual allocations that are monitored in the budget." The public early to pay debt services and dues, especially Iraq's foreign debts, and no failure has been recorded in Iraq during a decade and a half of time, and this is what made Iraq's credit worthiness high, as Iraq is located within Area B in the global credit rating tables that are evaluated by international credit rating companies. Known and periodically since 2015 until today.
Saleh explained, "The vast majority of internal public debt is in the possession of government financial institutions or the government banking system, and it is an (exclusive) internal governmental matter. There is a strategy in dealing with this debt, especially since the monetary authority currently acquires about 64% of the total internal debt and has the ability to In managing it in coordination with financial policy and with high accuracy, bearing in mind that the banking system annually obtains interest on that debt at a rate of 3%, and it falls within the annual allocations of the general budget.
Added 08/30/2023 - 6:58 PM
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