The International Monetary Fund issues a report on Iraq's economic policy

The International Monetary Fund issued a report on Iraq's economic policy, expecting Iraq's non-oil gross domestic product to grow by 5%.

An International Monetary Fund statement seen by Al-Iqtisad News stated, “A team of International Monetary Fund experts, led by Jean-Guillaume Poulain, met with representatives of the Iraqi authorities in Amman, Jordan, during the period 12-17 of this December, with the aim of discussing The latest developments, developments and prospects, in addition to discussing plans related to policies in the coming period.”
Bolan said, according to the statement, “The non-oil gross domestic product is expected to grow by 5 percent in 2023 in light of the significant expansion in public finances within the framework of the effective three-year budget law,” noting that “continuing implementation of the budget should help in continuing Strong non-oil growth in 2024. However, the decline in oil production after the closure of the oil pipeline linking Iraq and Turkey, and the reduction in production at the request of the OPEC+ group, will work together to reduce the growth of the gross domestic product in the years 2023 and 2024.” 
He added, "The inflation rate has declined from its peak by 7 percent in January of this year, and inflation is expected to stabilize during the coming months, thanks to the Central Bank of Iraq adopting a more stringent monetary policy, and the impact resulting from raising the exchange rate." The Iraqi dinar, the decline in global food prices, and the return of trade financing operations to normal with improved compliance with the anti-money laundering and terrorist financing framework.”
He continued: “The adoption of the budget setting method over a period of three years in June 2023 constituted a shift in the practice used for setting budgets in Iraq, with the aim of improving the level of financial planning and the continuity of implementing important development projects in the medium term,” stressing that “despite the delay Starting to implement the budget this year, the public finance balance is expected to transform from a large surplus achieved in 2022 to a budget deficit in 2023.”
He stated, “Experts expect the size of the government’s fiscal deficit to expand further in the year 2024, reflecting the full annual impact of budget measures. Also, the significant expansion in public finances, including a fundamental increase in the numbers of members of the public sector and retirement, creates permanent requirements for Public spending that will put pressure on public finances in the medium term.”
He went on to say: “Ensuring the sustainability of public finances, in the context of the uncertain outlook for oil prices, requires a gradual tightening of the fiscal policy stance, while at the same time working to ensure the protection of critical needs for infrastructure and social spending. This will require "Also mobilizing more non-oil revenues, containing the wage bill for government employees, and reforming the government retirement system. These measures must be supported by a move to a more targeted social safety net that works to provide better protection for vulnerable groups."
He explained, "The mission welcomed the government plans aimed at strengthening public financial management, including welcoming the steps taken by the government towards establishing the unified treasury account. In this context, the mission reiterated the importance of adhering to the framework for managing government guarantees," pointing out that "the Central Bank The Iraqi government has tightened its monetary policy appropriately, and this tightening includes increasing the interest rate on monetary policy tools and raising the mandatory reserve requirements. The mission welcomed the progress made in strengthening the domestic liquidity management framework, and encouraged the continuation of efforts made to get rid of excess liquidity and develop the inter-bank trading market. banks with the aim of enhancing the transmission of the impact of monetary policy.”
He went on to say: “Structural reforms aimed at stimulating economic diversification and creating job opportunities led by the private sector remain a pivotal factor in achieving sustainable and inclusive growth.” Priorities at this level include creating equal opportunities for the private sector by implementing reforms in banking and the electricity sector, reducing distortions in the labor market, and continuing efforts aimed at strengthening governance and reducing the spread of corruption.” He
stressed that “the Fund’s team of experts stands ready Readiness to support the Iraqi authorities in their reform efforts, and would like to thank them for the frank and fruitful discussions during the mission.”