In light of the assessment of the experts of the International Monetary Fund mission of the measures taken by the government and the Central Bank, which contributed to maintaining the transition of the Iraqi economy from a state of fragility to a gradual recovery during the second half of 2023, it turned out that “growth in the non-oil sector increased strongly in 2023 by 6%, of GDP with inflation declined to 4% after it was 7.5% at the beginning of the year.
This comes due to the measures of the Central Bank to control the general level of prices and reduce inflation, which is the most prominent task of monetary policy achieved, which is the lowest inflation rates achieved for 2023 in regional and Arab countries, and achieved because of the efforts made in regulating foreign trade financing and cooperating with the government in securing basic foodstuffs and providing ration card materials at subsidized prices.
The occurrence of these developments, the stability of the foreign exchange market, the safety and transparency of 95% of the external remittances of traders and importers through the electronic platform and at the official price are attributed to the opening of direct dealings with 30 foreign and Arab correspondent banks and the opening of dealing in local currencies of countries with which Iraq has an important trade exchange such as China, Turkey, the UAE and India.
After some interruptions following the implementation of new anti-money laundering and counter-terrorist financing controls on cross-border payments in November 2022, improved compliance with the new system, and the Central Bank of Iraq’s initiatives to reduce transaction processing times led to a recovery in trade finance in the second half of 2023.
The IMF welcomed “the initial steps taken towards establishing the Single Treasury Account (TSA), which is a critical tool for improving liquidity management.” Reference should be made here to “the efforts made by the central bank aimed at eliminating the surplus liquidity. The central bank increased interest rate on monetary policy instruments, raised mandatory reserve requirements, and began issuing 14-day Treasury bills last summer.
Therefore, the Fund called for supporting the existing efforts by the Central Bank by unifying untapped government deposits in the unified treasury account, refraining from fiscal policy in pro-cyclical trends, reducing dependence on monetary financing, improving public debt management, and from the insight of the International Monetary Fund confirms that the steps taken by the government and the central bank to accelerate the digital transformation of the economy, reduce dependence on money and enhance financial inclusion, which supports trends to launch a financial inclusion strategy.
Official statistics indicate that 558 government agencies published electronic payment tools in 2023, compared to 12 government agencies in 2022, and the number of cards to localize employees’ salaries reached 8653,000 cards, the number of cards issued is 17822310 cards, and the value of using electronic payment tools in 2023 amounted to about 12 million dollars through 32842 movements.
