Sunday Morning Iraq Economic News Highlights 4-2-23
An Iraqi Government Official Expects The Dollar To Drop To 1,400 Dinars By The End Of The Week
2023-04-02 04:57 Shafaq News/ An Iraqi government official expected, on Sunday, that the price of one dollar against the local currency would drop to approximately 1,400 dinars by the end of this week.
In an interview with Shafaq News agency, the official said, “The dollar is witnessing a daily decrease of one to two dollars.”
He added, “The price will then witness stability and a slow decline until it reaches near the official price, with a rise of about three or four tigers from the official price of 1,300 dinars for one dollar,” adding that there is “a plan for the parallel price to be near the official price and not to fall directly in order to It does not affect merchants and the market.”
It is noteworthy that the price of the dollar is witnessing a daily decline against the Iraqi dinar in the parallel market, to reach today 149,900 thousand dinars against 100 dollars, at a time when the dollar was fixed in the budget at 1,300 dinars against one dollar.
On Tuesday, March 21, the Governor of the Central Bank of Iraq, Ali Al-Alaq, expected a decrease in the parallel dollar exchange rate (the market price and local exchange rates) during the coming period.
Al-Alaq said at the time, in a special statement to Shafaq News Agency, “The Central Bank launched several packages of measures, and the packages that were launched are dealt with seriously to control the exchange rate of the parallel dollar.”
Al-Alaq indicated that “the central bank’s measures are continuing to control the exchange rate, and we expect a decrease in the parallel exchange rate.”
The parallel price means the exchange rate of the dollar in the market and exchanges, and not the official price set at 1132 dinars per dollar, according to the decision of the Board of Directors of the Central Bank of Iraq, which was approved by the Council of Ministers.
And the Central Bank of Iraq issued three reform packages, which it said came with the aim of addressing the rise in dollar exchange rates. LINK
Al-Khalidi: The Percentage Of The Operational Budget In Iraq Is Terrifying, Being The Highest In The World
Information / Baghdad On Sunday, the Secretary-General of the Bayariq Al-Khair Movement, Muhammad Al-Khalidi, described the operating budget numbers as terrifying, indicating that the percentage is the highest among the world’s budgets.
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l-Khalidi said in an interview with Al-Maalouma, “The budget is a very important draft law in the Iraqi state, and it cannot be passed without national consensus, as it represents the rights of more than 40 million people.”
He added, “By looking at some budget items, some matters of concern can be monitored, especially the operating budget, which amounted to more than 70%, which is perhaps the highest in the world, because all the determinants stand at 20%, which shows the large difference in numbers, which poses a real danger if Oil prices have fallen to high levels.
He pointed out that “Iraq depends on selling oil by 90%, and any collapse in prices will make it face very difficult choices in securing salaries and the rest of the other requirements, stressing that the 2023 budget is the most complex in the Iraqi state after 2003.”
The total amounts allocated for the 2023 budget amount to 200 trillion Iraqi dinars, with a deficit estimated at about 60 trillion, according to the figures currently presented. LINK
The Large Deficit In The Upcoming Budget Is Scary And Will Be Repeated In The Coming Years
Amer Al-Jawahiry To / NINA /: Sunday 02, April 2023 11:10 | Economical Number of readings: 221 Baghdad / NINA / – The consultant in industrial development and investment, Amer Al-Jawahiri, confirmed: The large deficit in the upcoming budget is frightening and will be repeated in the coming years.
He told the National Iraqi News Agency / NINA /: The government’s approach to preparing a budget for three years is reasonable, but it is frightening for the future of Iraq through the deficit rate of 32%, equivalent to 64 trillion dinars, and this is very big.
He explained: The deficit will be repeated in subsequent years, and there are no resources to cover this deficit, stressing the importance of reducing expenditures to the lowest possible extent. It is preferable in the future that the budget be without a deficit, and that we take into account stopping borrowing, whatever it is
https://ninanews-com.translate.goog/Website/News/Details?key=1044166&_x_tr_sl=auto&_x_tr_tl=en&_x_tr_hl=en
More Than 50 Million Dollars… The Region’s Losses Due To The Cessation Of Oil Exports
Today, Saturday, the economic expert, Bahgat Ahmed, revealed the size of the financial losses as a result of the suspension of Kurdistan’s oil exports through the Turkish port of Ceyhan.
Ahmed said in a press interview seen by “Takadam” that “there are daily losses estimated at about 50 million dollars as a result of stopping the export of oil after the International Arbitration Court’s decision on the illegality of exporting the oil of the Kurdistan region through Turkey.”
He added, “Most of the foreign fields and companies have stopped, and this matter will be reflected in the region’s budget and the payment of employee salaries, in the event that a new agreement is not reached with Baghdad.”
Iraq won an arbitration case, which it filed last Thursday, against Ankara regarding the export of crude oil from the Kurdistan region through the Turkish port of Ceyhan without referring to the Iraqi oil marketing company “SOMO” by the arbitral tribunal of the International Chamber of Commerce in Paris.
https://takadum-news.com/archives/157289
For The First Time In Years, Dollarization Is Declining In 5 Vital Sectors In Iraq
The head of the Chambers of Commerce in Diyala, Muhammad al-Tamimi, confirmed, on Saturday, that dollarization decreased in 5 vital sectors in Iraq for the first time in many years.
Al-Tamimi said in a press interview, which was seen by “Takadam”, that “the reliance on the dollar in the payment of dues for trade exchange inside Iraq emerged remarkably after 2007 and formed the end of 2022, a percentage of up to 70% of the payment mechanisms, which formed what is known as the phenomenon of dollarization, which has serious risks, especially since it It is subject to procedures and challenges that could make the entire economy hostage to the outside world.
He added, “The procedures of the Central Bank and the government in reformulating the mechanisms of internal dealings in dinars in paying all dues away from the dollar created an atmosphere that contributed to reducing dollarization in 5 vital sectors, which are the car market and payment of dues between merchants, in addition to reducing transfers in dollars between governorates.”
He pointed out, “Although the decline is slight, it is an indication of the possibility of abandoning dealing in dollars internally, and this is very important to keep the economy away from any vibrations that lead to damage and raise prices.”
And the Iraqi markets have suffered in recent months from a remarkable rise in the exchange rate of the dollar against the dinar, which led to an increase in the prices of materials in the markets.
Fears Of The Collapse Of Oil Prices And The Delay In The Budget Put Iraq On An “Uncharted Road
2023-04-02 02:17 Shafaq News/ Although the Iraqi Council of Ministers, since last March 13, referred the draft budget law for the years 2023, 2024, and 2025 to the Parliament, the Presidency of Parliament did not transfer the draft law to the Finance Committee for discussion and then presenting it to the Parliament for a vote until today. .
Specialists attribute this delay to the tensions and disagreements between some political blocs, especially the Sunni parties, which are trying to find solutions to other outstanding issues through “bargaining” on the budget law, in addition to understandings with the Kurds and the percentage of their share in it. It is also expected that there will be obstacles for independent parties and representatives. Independents to protest the passing of the recent election law.
The delay in approving the budget causes negative repercussions on economic activity from various aspects, in light of the “total paralysis” witnessed by the private sector, due to the suspension of government funding and projects, the disruption of job bonuses and promotions, the dollar crisis and other negatives that are reflected in purchasing power and a decrease in living standards in all governorates. Iraq, according to specialists.
Absent Balance
Adviser to the Prime Minister for Financial Affairs, Dr. Mazhar Muhammad Salih, says, “Iraq has entered the fifth chapter of its financial life without the availability of a federal law for the general budget until now, as the joints of the national economy with its projects and programs are still looking forward to enacting the Federal General Budget Law for the year 2023.”
Saleh added to Shafaq News agency, “The absence of the general budget law over a year and a half, constitutes an ambiguous image for decision-makers in the investment and business sectors of civil activity, due to the interdependence of the state’s new projects and programs with intertwined relations with market forces, especially the labor, equipment and contracting markets.” and others.”
And he continues, “Government investment spending is an important accelerating lever in the growth of income and employment opportunities and market stability, because government spending has a high impact force on all aspects of economic activity, whether directly or indirectly, and with significant impact rates that reach 80% of employment and demand cases.” aggregate in the economy.
Based on the foregoing, “the clarification of the country’s legislative financial picture, and the launch of its effects and tools through the general budget, are linked to an important connection with the increase in general economic activity, and the stability of private sector decisions, or the market economy in particular,” according to the Prime Minister’s Advisor for Financial Affairs.
Saleh explains, “The country’s financial policy has adopted medium-term financial planning by presenting a draft budget for the two years 2024-2025, which, if enacted, will provide high information efficiency that helps investment opportunities and market makers in particular to build their decisions high and early, which is something that strengthens at the time Undoubtedly, it will provide employment opportunities and encourage economic growth.”
Budget Disputes
A member of the Parliamentary Finance Committee, Representative Thamer Al-Hamdani, indicates that “the draft budget law for the three years was received by the Presidency of Parliament from the government nearly a month ago, but the Presidency did not transfer it to the Finance Committee until it is discussed and presented for voting in the House of Representatives until today. Because of the tensions and disagreements between some political blocs.
Al-Hamdani told Shafaq News agency, “Some political blocs believe that the budget should be for one year, while others believe that the three-year budget will give political and economic stability.”
A member of the Finance Committee confirms, “The size of the budget and the percentage of its deficit are large, but it is possible to discuss it in the Finance Committee, reduce the deficit and the amount of the budget, and address some of the lapses in it, so that it is a safe budget, especially there is a fear of a crisis due to the drop in oil prices.”
Al-Hamdani expressed his hope that “the Presidency of Parliament will refer the budget law to the Finance Committee during the next few period, so that the committee in turn will start holding meetings to complete it and present it to the House of Representatives for a vote, so that the stage of direct implementation of the government program begins according to what is included in the budget.”
Regarding the fears of the three-year budget, the deputy pointed out that “these fears are due to the regional and international situation, and the harbingers and problems surrounding Iraq, from the possibility of a drop in oil prices due to the lack of market stability, as well as the issue of dollar exchange rates, and this fear is more peaceful than political. Because everyone wants to serve on the condition that there is sobriety and reassurance of the budget law.
The Repercussions Of The Budget Delay?
The delay in approving and enacting the budget law causes negative repercussions on the market and monetary movement from various aspects, and greatly affects economic activity, according to researcher in economic affairs, Ahmed Eid.
Eid added to Shafaq News agency, “Many economic and monetary activities are suspended, including job bonuses and promotions, in addition to the issue of balancing the job ladder and raising salaries compared to the rise in inflation levels the country is witnessing, in addition to the significant increase in poverty rates in all governorates of Iraq.” .
He explains, “All of this is reflected in the purchasing power and the decline in living standards, in addition to the disruption of many economic projects, and the decline in the size of the balance of payments.”
Other Influences
Another negative effect of the delay in the budget is that “the private sector is currently in a state of complete paralysis due to the cessation of government funding and the cessation of launching projects, whether service, investment or even operational, as a result of the association of most of the corporate sector with the government sector,” according to the economist, Dr. Ahmed Fouad.
Fouad added to Shafaq News agency, “There is confusion and anxiety prevailing among employees because of rumors that appear about salaries and allocations, in addition to new job grades, and the salary scale to be changed, and this waiting, as it increases, will negatively affect the price rise and the crisis of the US dollar, which is linked to a large part of it.” at the dollar exchange rate in the budget.
When Is The Budget Approved?
Fouad points out, “The approval of the budget is expected after the next Eid al-Fitr, but there are some expected delays due to the struggle of political parties among themselves over the approval of a number of laws, especially the Sunni parties that are working to find solutions to other outstanding issues by bargaining over the budget law.”
Among other obstacles, the economist states, “the understandings with the Kurds and their share of the budget and the financial releases that the Sudanese government secretly promised to them, and there are also expected obstacles by independent parties and independents due to the passing of the recent election law.”
Fears Of A Collapse In Oil Prices
The oil expert, Hamza Al-Jawahiry, explains that “Oil is a strategic commodity, as it is very important for the perpetuation of the wheels of production and life in all countries without exception, and now European countries are going through a crisis as a result of the war in Ukraine, and most of them are non-oil-producing countries, as they import oil, with the same Time pays very high bills as a contribution to the Ukrainians, who are fighting the most powerful country in the world in terms of military terms, so they found themselves in a real dilemma to bear the high bills of war and energy.
Al-Jawahiry added to Shafaq News agency, “Therefore, Western countries in general stand in a real confrontation with OPEC Plus, and the aim of this entrenchment is to reduce energy bills, but the positions of OPEC Plus countries, on the other hand, are very strong, as they are defending their most important strategic commodity in the world.”
And he continues, “None of the two parties can resolve the confrontation in his favour, because they have effective tools in this confrontation, hence the fears that oil prices could collapse at any time, and the biggest affected will be Iraq, as it depends on oil revenues to supply the budget by a percentage.” 95%, while the rest of the OPEC plus countries have other financial resources, not as is the case with Iraq, the rentier state par excellence.
And he explains, “From this standpoint, we see the need for the default price of oil in the budget to be no more than $50, and it is preferable for the price to be $45 per barrel.”
On March 13, the Iraqi Council of Ministers approved the draft budget law for the years 2023, 2024, and 2025, and referred it to Parliament.
The 2023 budget is the largest in the history of Iraq after 2003, and Prime Minister Muhammad Shia’ al-Sudani said that its total amounted to more than 197 trillion dinars (135 billion dollars), including an operational budget of more than 150 trillion dinars, and an investment budget of about 47 trillion.
The estimated deficit rate is close to 63 trillion Iraqi dinars, and the total expected revenues are equivalent to more than 134 trillion dinars, while oil revenues are estimated at 117 trillion dinars based on an oil price of $70, while non-oil revenues amount to 17 trillion.
The last budget approved in Iraq dates back to April 2021, while one was not adopted in 2022 due to the political turmoil that paralyzed the country for a year after the last legislative elections. LINK
“Al-Iqtisad News” monitors the exchange rates of the dollar against the dinar
Market Economy News – Baghdad Al-Eqtisad News publishes a list of exchange rates of the dollar against the dinar in the Iraqi markets.
Baghdad Sale: 150,250 dinars per 100 dollars Buying: 149,250 dinars per 100 dollars
South Sale: 150,500 dinars per 100 dollars Buying: 149,500 dinars per 100 dollars
North Sale: 150,750 dinars per 100 dollars Purchase: 149,750 dinars per 100 dollars
https://economy-news.net/content.php?id=33272
Al-Sudani’s advisor: A “daily and tangible” decline in the exchange rate of the parallel dollar
Money and business Economy News _ Baghdad The financial and economic advisor to the Prime Minister, Mazhar Muhammad Salih, said that financing foreign trade is in the recovery stage, while stressing that government measures prevented the smuggling of dollars abroad.
Saleh said, in a press statement, seen by “Al-Iqtisad News”, that “foreign trade financing operations in foreign exchange for the private commercial sector are currently in a stage of recovery and escalating adaptation in the face of the new international compliance requirements that have been implemented since last November.
The three measures launched by the Central Bank and government regulatory measures that simplified foreign trade operations for the private sector are all undergoing an accelerated state of adaptation towards accelerating external transfer and financing trade at the official exchange rate.
He added, “The Central Bank’s window sales began to touch their previous normal rates of sale, reaching nearly $200 million per working day in the foreign currency auction, which is a very stable level of sales to meet the market demand for foreign exchange, and is supported at the same time by high reserves of foreign currency.” Which is in the possession of the monetary authority, which enables it to effectively intervene in the stability of the market in an easy and effective manner.
And the financial and economic advisor to the Prime Minister stated, “In light of the above, the price differences between the official exchange rate of the dinar and the price parallel to it have not widened, but there are strong signs of contraction and a clear gradual decline towards the convergence of the two prices, especially the decline of the dollar in the parallel price on a daily and tangible basis.” .
Saleh continued, “The legal institution in particular took its active and distinguished role in protecting and sounding the national economy from attacking its constants and variables through illegal external leakages of the country’s financial resources, specifically foreign currency,” noting that “its active role is equivalent to the power of imposing institutional discipline in managing and directing the country’s resources.”
Finance in preserving its flows in accordance with the laws, regulations and controls that govern all financial transactions and protecting the national economy from corruption vehicles and the forces of assault on public money and the country’s economic system.
He pointed out that “attrition and assault on the constants and variables of the economic system is one indivisible case,” pointing out that “the power of law enforcement and its distinguished role has become clear in providing service, foremost of which is the stability of the legal effectiveness of the national economy.”
He explained that “preserving the country’s financial wealth, specifically preventing illegal disposal of foreign currency and addressing wasteful operations or intentionally diverting them outside the national economy, is one issue that cannot be divided in all cases.”
He continued, “The government’s measures are a new stage in establishing the life of the Iraqi state, which has taken a distinguished path at the current stage in the development of the degree of control and cooperation internally and externally, including cooperation with the international financial and legal community in combating money laundering activities and all transient financial crimes.”
https://economy-news.net/content.php?id=33269
