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Don961:  International Monetary: We are ready to support reform efforts in Iraq

Saturday 26 December 2020   Baghdad: Morning

The head of the International Monetary Fund’s mission in Iraq, Toker Mirzoyev, welcomed the cabinet’s approval of the draft general budget bill for the fiscal year 2021, while announcing the fund’s readiness to support reform efforts. The Council of Ministers voted to approve the federal budget for the fiscal year 2021, at the extraordinary session held last Monday, headed by Prime Minister Mustafa Al-Kazemi.

Pandemic and oil prices

Mirzoyev said in a statement to the mission received by “Al-Sabah”, Friday: “The Corona pandemic and the sharp decline in oil prices and production have exacerbated economic weaknesses in Iraq,” and pointed out that “due to the acute shortage in financing public finances and the challenges facing the payment of external payment obligations.” “And local, including wages and pensions, must be made a critical recalibration of economic policies in order to maintain the stability of the economy.”

He continued, “We welcome the approval of the Iraqi Council of Ministers to the draft general budget bill for the fiscal year 2021, which, according to our understanding, envisages implementing important financial reforms,” noting that “despite the difficulty of these reforms, along with the reduction of the currency exchange rate that was announced recently, they constitute major steps. The importance of helping to reduce large imbalances in the external balance of payments and public finance, and to ensure economic stability. 

Increase remittances to the poor

The statement clarified that «the Iraqi government has developed plans to significantly increase cash transfers directed to the poor and to enhance health-related spending, which are necessary to mitigate the impact of the Covid-19 crisis on the most vulnerable groups».

He pointed out that the short-term plan should be followed by more subsequent reforms, which include deeper structural reforms, in order to strengthen the resilience of the economy, expand the fiscal space to include the processes of reconstruction and social spending of critical importance, and lay the foundation for higher growth rich in jobs and more inclusive. For everyone in the medium term ».

He declared, “The International Monetary Fund is ready to support the reform efforts made by the Iraqi government at this challenging juncture.”  LINK