A banking source reported today, Monday (September 9, 2024), that there has been confusion within the foreign currency markets, while it is likely that their prices will rise. The source told “Baghdad Today”,

“The Central Bank will issue new decisions regarding foreign currency prices and the way it is traded inside Iraq.” He added, “These decisions are likely to cause an increase in the dollar exchange rates in the parallel market due to the scarcity of the currency.”

The source stated that  “the aim of these decisions is to limit currency smuggling or its monopoly in the hands of weak souls.”

This afternoon, the dollar exchange rates witnessed new increases on the two main stock exchanges and local markets.

The “Baghdad Today” correspondent said that the dollar exchange rates recorded 150,500 for every 100 dollars on the two main stock exchanges. He added that the selling price at money exchangers also rose to 152,500 for every 100 dollars.

The Collapse Has Begun… 8 Revelations About The Truth About Iraq’s Economy

   An economic researcher identified 8 latent weaknesses in the Iraqi economy, in a comment on fears of economic collapse, describing the collapse as having occurred a long time ago, and the fluctuations in oil prices prolong or accelerate the final collapse.

Economic researcher Munar Al-Obaidi said in a clarification followed by Sumaria News, that with the decline in oil prices and the unprecedented rise in operating expenses to reach a growth rate in current expenses exceeding 30% and a decline in revenues by 16%, the most important question arises: Is the Iraqi economy facing a crisis or a collapse? He pointed out that “the factors of the sustainability of any economy depend primarily on the diversity of its sources and the control and planning of its expenditures.”

He explained that “we cannot expect the sustainability of an economy in which more than 500 thousand researchers enter the labor market annually and is unable to create productive job opportunities of more than 20 to 30 thousand opportunities at most, and an economy based on the sale of one commodity and its prices are not controlled through one outlet and for only two countries.”

He continued in describing the Iraqi economy as “an economy based on a deteriorating business environment with no role for the private sector in turning the wheel of the economy, an economy that adopts the private sector and with patronage laws and legislation that give preference to the public sector, a consumer economy based on an unprecedented consumption pattern without production having a role, an economy that employs more than 6 million employees with almost zero productivity, an economy marred by corruption, lack of transparency and inequality of opportunity, an economy that does not have foreign investments and is unable to attract them.”

He considered that “the collapse happened a long time ago and the fluctuations in oil prices are merely prolonging or accelerating the process of the collapse and the manifestations of the collapse will be faster than the decline in oil prices.”

We Are Heading Towards Financial Fragility.. How Did The New Appointments Affect The Budget?

  Finance and development expert, Aqil Jabr Al-Muhammadawi, stressed today, Monday, the necessity of reconsidering the engineering of public finances in light of the threats and risks of the decline in crude oil prices in global markets, while explaining the impact of new appointments on the budget.

Al-Muhammadawi said, in an interview with “Al-Eqtisad News”, that “there is a priority to review the priorities of public finance and implement the federal budget for the remainder of 2024 in light of the negative repercussions of the decline in oil prices on the state’s public finances and its effects on the federal budget and the implementation of the government program’s targets.”

He added: “We are moving towards a financial fragility of the federal budget structure, and not within a fragile budget mentality; because it is based on solid accounting and financial rules, principles, and foundations, clear, specific, and tangible economic goals, and the ability to be implemented in reality and in fact, in addition to the availability of financial capacity or abundance, in light of the threats and risks of the decline in oil prices, which constitute more than 85% of the revenues of the federal budget structure.”

The financial affairs specialist pointed out that “there is a noticeable increase in the 2024 budget, especially in the number of employees, to reach approximately 4.08 million employees, an increase of 18.1 million employees over 2019, while it did not exceed 209 million employees in that year 2019, in addition to increasing health care to become approximately 25 trillion dinars in 2023, and the increase is expected more in 2024, with an increase of 5.3 trillion in 2023 over what was actually achieved in 2019.”

Al-Muhammadi said, “This increase represents additional burdens on the state’s public finances, which are not met by new sources of revenue or sovereign investment funds that produce new financial brides.”

He stressed: “The importance of quickly reviewing, with steps and a well-studied methodology, the reorganization and analysis of the federal budget structure and the corresponding real and tangible spending priorities, and the possibility of re-engineering the structure of public expenditures and the quantitative management of some non-governing paragraphs.”