Iraq Economic News 5-18-2024
The International Monetary Fund Calls On Iraq To Cancel The “Appointments” And Correct Its Financial Conditions
Shafaq News/ The International Monetary Fund stressed, on Thursday, the need for Iraq to gradually correct its financial conditions to achieve debt stability in the medium term and rebuild financial reserves.
This comes after the Executive Board of the International Monetary Fund (IMF) concluded Article IV consultations with Iraq and studied and approved the employee evaluation, before recommending control over public wages and the gradual abolition of compulsory employment, according to a Fund report seen by Shafaq News Agency.
It is expected that the next Article IV consultations with Iraq will be held in the standard 12-month cycle, according to the International Monetary Fund report and schedules.
In its statement, the Fund welcomed the strong economic recovery, the decline in inflation in Iraq to 4% by the end of 2023, and the improvement in domestic conditions that led to the implementation of the first 3-year budget. He stressed the
necessity of sound economic policies and structural reforms in Iraq to secure public finances and debts, given the regional disputes that may affect oil prices. He pointed to
the strong recovery in the non-oil economy in Iraq after a contraction in 2022-23, and that
Iraq was “largely” unaffected by the conflict in the region, pointing to the revaluation of the currency as of February 2023, and the return of trade financing to normal.
However, the imbalances were exacerbated by the significant fiscal expansion and falling oil prices.”
The Fund’s report expected that the continued fiscal expansion would enhance growth in 2024,
at the expense of further deterioration in financial and external accounts and
Iraq’s vulnerability to oil price fluctuations.
Without policy adjustment, the risk of medium-term sovereign debt stresses is high and external stability risks could arise.
Key downside risks include a significant decline in oil prices or the spread of conflict in Gaza and Israel.”
The executive directors agreed, according to the report, “with the thrust of the staff assessment, and welcomed the
strong economic recovery,
low inflation, and
improved domestic conditions
that led to the implementation of the first-ever three-year budget.
They noted that the risks were tilted towards the downside, given regional disputes and high dependence.” on the volatile oil prices, and that
a major financial expansion could lead to financial and external imbalances.” The directors also stressed “the
need for sound macroeconomic policies and structural reforms to
secure public finances and debt,
sustainability,
promote economic diversification, and
achieve sustainable and inclusive growth led by the private sector.” The Directors stressed that
“a gradual but significant fiscal adjustment is needed to stabilize debt in the medium term and rebuild fiscal safety margins.”
They encouraged the authorities to focus on
controlling public wage rolls,
phasing out compulsory employment policies, and
mobilizing non-oil revenues, with
Better targeting of social assistance. Directors agreed that
“immediate implementation of
Customs and Revenue Administration reforms,
full implementation of the Single Treasury Account,
strict oversight and limiting the use of extra-budgetary funds and
government guarantees
are essential to support fiscal consolidation.
Reducing cash financing and reforming the pension system are also important.””.
https://shafaq.com/ar/اقتصـاد/النقد-الدولي-يدعو-العراق-ل-لغا-التعيينات-وتصحيح-وضاعه-المالية
Provoking Thoughts and Points to Ponder on Advice :
It is well enough, when one is talking to a friend, to lodge in an odd word by way of counsel now and then; but there is something mighty irksome in its staring upon one in a letter, where one ought to see only kind words and friendly remembrances. – Mary Lamb
Men of much depth of mind can bear a great deal of counsel; for it does not easily deface their own character, nor render their purposes indistinct. – Arthur Helps
Have more than thou showest, Speak less than thou knowest. – William Shakespeare
What you don’t see with your eyes, don’t invent with your tongue. – Jewish proverb
If you keep your mind sufficiently open, people will throw a lot of rubbish into it. – William A. Orton
