By John Lee.
In the latest credit rating report by Standard & Poor’s (S&P), Iraq has retained its credit rating at B- / B with a stable outlook.
According to the statement from the Ministry of Finance, the report highlights Iraq’s financial and economic stability.
It continues:
“This new rating reflects Iraq’s continued economic and financial reform policies, led by the Ministry of Finance. It also acknowledges Iraq’s ability to maintain foreign currency reserves exceeding external public debt while meeting other external financial obligations, thanks to stable crude oil prices.
“The report considers several key indicators, including the Iraqi Parliament’s approval of the three-year budget (2023-2025) aimed at revitalizing infrastructure projects and economic needs. It also notes that the formation of the government in late 2022 has contributed to political stability.
“Furthermore, the report predicts a significant surplus in the current account within the economic forecasts, adding to the strong foreign currency reserves, ultimately supporting Iraq’s external debt service capabilities over the next 12 months.
“S&P anticipates that economic growth will reach 2.6% annually during the years 2023-2026, driven by increased oil production and its impact on non-oil sector growth. In addition, annual inflation rates are expected to decrease to 4% in July 2023, compared to 5-6% in 2021 and 2022. This reduction is attributed to government measures involving currency revaluation, price control, and government support for food and energy prices.
“The agency suggests that Iraq’s credit rating could improve if economic growth rates rise, government revenue diversifies both from oil and non-oil sources, and individual income shares increase from the national income. Continuous financial and economic policy reform is also seen as a positive factor.”
(Source: Ministry of Finance)
