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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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Established in 2006 as a Community of Reality

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    80% of Iraq's revenues are eroded to cover debts... and warnings of a banking crisis

    Rocky
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    • Post n°1

    Iraq - 80% of Iraq's revenues are eroded to cover debts... and warnings of a banking crisis Empty 80% of Iraq's revenues are eroded to cover debts... and warnings of a banking crisis

    Post by Rocky Sun 11 Aug 2024, 7:22 am

    [size=38]80% of Iraq's revenues are eroded to cover debts... and warnings of a banking crisis[/size]


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    August 11, 2024[You must be registered and logged in to see this link.]
    Baghdad/Al-Masala: Iraq faces major challenges in terms of its financial management, as the internal debt has increased to reach 80 trillion Iraqi dinars, representing more than 40% of the gross domestic product and about 80% of the value of annual revenues.
    This situation raises concerns about the sustainability of public finances in the country, especially with the increase in operating expenses and the direction of borrowing to cover these expenses instead of investments that strengthen the economy.
    Iraq's budget is considered one of the largest in the region in terms of spending, but it depends heavily on oil revenues, which constitute the largest part of revenues.
    Under these circumstances, domestic debt is increasing at an alarming rate. Debt is usually used in developing countries to develop infrastructure and economic projects, but in the case of Iraq, loans are mainly used to cover operating expenses, such as salaries and government support, and this practice leads to serious problems in the long run, as the borrowed money does not contribute to the creation of productive assets or improvement in the country's economic structure.
    The government’s continued borrowing without clear controls and mechanisms to limit the internal debt ceiling will exacerbate the financial crisis. These debts, which require continuous interest and repayment over years, will become a burden on future generations. With the current lack of oversight over how this money is spent, Iraq may face a real risk in the future, especially if global oil prices, the main source of revenue, fall.
    Economic analyst Munar Al-Obaidi pointed out that those who believe that the domestic debt is not influential because the government borrows from local financial institutions are far from reality. This money is basically citizens’ money deposited in banks, and the government’s inability to pay could lead to a banking crisis, as happened in Lebanon.
    The inability to repay these debts could lead to a loss of confidence in the banking system, which would have disastrous consequences for the economy.
    Al-Obaidi called for the need to reduce operating expenses and direct loans towards investments that create jobs and ease pressure on the public sector. This warning is particularly important in light of the current rise in oil prices, as this period should be used to strengthen the economy rather than relying on borrowing.
    The financial situation in Iraq requires radical and immediate reforms to avoid further deterioration, and the internal debt, if not managed wisely, will lead to disastrous results for the national economy.
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