Iraq News Highlights 8-7-2024

Economy |Baghdad Today – Baghdad   Today, Wednesday (August 7, 2024), the Trade Bank of Iraq called on all exchange companies of categories (A – B) to visit its branches to participate in entering the window for buying and selling foreign currency for cash dollars for travelers .

The bank said in a statement received by “Baghdad Today”, “Based on the directives of the Central Bank of Iraq and to achieve the objectives set by the management of the Trade Bank of Iraq, in order to facilitate and simplify the procedures for selling cash dollars to travelers, the Trade Bank of Iraq calls on all exchange companies of categories (A, B) licensed by the Central Bank of Iraq to visit its branches to open a special bank account to participate in entering the window for selling and buying foreign currency for cash dollars for travelers.

It is noteworthy that the Central Bank of Iraq decided on July 4, 2024, to start selling dollars to travelers, exclusively through corporate and bank outlets at international airports.

Meanwhile, the Central Bank decided to grant category “AB” exchange companies the ability to record internal and external remittance activities via the FITR platform.  LINK

Financial Disaster Looms: Two-Thirds Of Oil Revenues Spent On Salaries And Welfare

August 7, 2024  Baghdad/Al-Masala: Iraq is facing a serious financial crisis that threatens the stability of its national economy, as figures reveal that a large portion of oil revenues is spent on salaries and social costs.

With alarming figures showing that more than two-thirds of oil revenues are spent on salaries and social welfare, concerns are real about the country’s ability to cope with potential fluctuations in global oil prices.

As pressure on the general budget continues, the big question arises: How will Iraq deal with the upcoming economic challenges in light of increasing financial dependence on oil revenues?

Economic analyst Nabil Al-Marsoumi said that salaries and social welfare consume a large portion of Iraq’s oil revenues, leaving the national economy vulnerable to fluctuations in global oil prices.

The state’s actual accounts for the first half of 2024 showed worrying data indicating that:

– Salaries of employees on the permanent staff amounted to 28.189 trillion dinars.

– Social care costs amounted to 12.244 trillion dinars.

– Total salaries and social care amounted to 40.433 trillion dinars.

These numbers represent:

-69% of general expenses

-77% of operating expenses

-69% of oil revenues

This means that more than two-thirds of oil revenues are spent on salaries and social welfare, putting significant pressure on the public budget and limiting the ability to finance other projects.

And the drop in the price of a barrel of oil to $60 will result in oil revenues being barely enough to cover salaries and social welfare costs alone.

The economic analyst commented, saying: “May God prolong the life of oil, raise its price, and keep the horror of decline away from it,” expressing hope that oil prices would continue to rise to avoid negative effects on the national economy.

This warning comes at a time when global markets are facing significant fluctuations in oil prices, making it necessary for the Iraqi government to take measures to improve resource management and enhance non-oil sources of income to ensure financial and economic sustainability. https://almasalah.com/archives/97832

Dollar Exchange Rates Rise In Iraqi Stock Exchanges

 Local Alsumaria News publishes the exchange rates of the dollar against the Iraqi dinar in the local Iraqi markets for Wednesday, August 7, 2024.

The dollar prices rose slightly at the opening of the Al-Kifah and Al-Harithiya stock exchanges in Baghdad, recording 149,950 dinars for every 100 dollars. As for the selling prices in the exchange shops in the local markets in Baghdad, they rose, as the selling price reached 151,000 dinars for every 100 dollars, while the buying price reached 149,000 dinars for every 100 dollars.

On February 7, 2022, the Council of Ministers announced its approval to amend the dollar exchange rate to 1,320 dinars per dollar.

For about a year, specifically since the Central Bank began operating the electronic platform and the international financial transfer system “SWIFT”, the dollar exchange rate in Iraq has not witnessed stability despite the government and the Central Bank’s attempts to control the exchange rate in parallel markets.  LINK

Economist Explains The Impact Of Regional Tension On Iraqi Oil Exports

Economy  Information/Baghdad…  Economic expert Safwan Qusay accused America and the Zionist entity of creating tensions in the region and affecting oil exports.

Qusay told Al-Maalouma, “Oil prices have fallen to $77 per barrel, but the value of the decline is less than the decline in the value of stocks.”

He added, “There is a fear of the expansion of the circle of conflict in the region, especially since Iran is a large country and the process of its entry into a conflict in the Middle East requires time and funding. Certainly, the American economy will shift from a development zone to a war zone, which will affect industrial and technological companies.”

He added, “Oil supplies will be affected in the event of a comprehensive war in the Strait of Hormuz, as exports from this region represent 20 percent of the world’s oil exports.”

He explained that “the Strait of Hormuz represents a pivotal point, as any conflict in this strait will negatively affect Iraqi oil exports as well as revenues.” He explained that “Iraq has a reserve at the level of the Central Bank that can finance operating expenses for no less than 360 days only.” LINK

Finance Figures Lead Experts Into A “Fiery Debate”… Continuous Bleeding Of Iraq’s Financial Future

 Economy  Experts and those interested in economic affairs in Iraq are immersed in a deep discussion about the size of the “old renewed” danger, which the spending and revenue figures remind us of from time to time with an increase in the risk rate, as a result of the increase in the size of spending monthly and annually in Iraq.

The latest report of the Ministry of Finance’s accounts revealed the size of revenues and expenditures in Iraq during the first half of the current year.

The report showed that employee salaries and social welfare consume two-thirds of the budget revenues, with a continuous increase due to continued employment and continued increase in allocations, with expectations that salary amounts will rise above the 50 trillion barrier for the first time by the end of the current year, in contrast to indicators of a decline in Iraq’s revenues due to the decline in oil prices.

Employee salaries in Iraq have reached more than 28 trillion dinars and social welfare more than 12 trillion dinars, so that the total welfare salaries and salaries are more than 40 trillion dinars during the first half of this year, which was described by the economic expert Nabil Al-Marsoumi as more than two-thirds of public expenditures and oil revenues are spent on salaries and welfare. Al-

Marsoumi explained that if the price of a barrel of oil falls to $60, oil revenues will be enough to cover salaries and social welfare only.

Accordingly, this means that Iraq is separated by less than $20 per barrel, so that all investment projects and all types of Iraqi expenses will stop, even the ration card perhaps, and the expenses of commodity supplies for schools, hospitals, and others.

Accordingly, Al-Marsoumi comments by saying: “May God prolong the life of oil, raise its price, and keep the horror of the decline away from it!”

Economic expert Munar Al-Obaidi said two days ago that it is expected that government sector salaries for the year 2024 will exceed the 50 trillion Iraqi dinar barrier for the first time in Iraq’s history, reaching 56 trillion Iraqi dinars and representing more than 44% of total expenditures after representing less than 40% of total expenditures in previous years. The

total value of government sector salaries until mid-2024 amounted to 28 trillion Iraqi dinars, an increase of 19% compared to last year. In contrast, total revenues for the current year are expected to decrease by 3% compared to the previous year, according to Al-Obaidi.

Amidst this raging debate about the ongoing indicators of the slow collapse, death and gradual bleeding of Iraq’s financial power and its financial fate, with rapidly rising expenditures and declining revenues, specialists describe the most dangerous payments as the monthly payments in a fixed installment that are not linked to the increase or decrease in revenue, namely salaries and the share of retirees in the budget, and the monthly share of care and support in the budget,

 because they are expenses that are difficult to reverse except by the trick of reducing the value of the currency and have become exposed after 2021, or by imposing taxes and withholding allocations, and they will face popular rejection, in a vicious circle from which there is no escape. LINK