Poverty in Iraq has increased with dinar’s devaluation: spokesperson
Iraq’s poverty rate has increased slightly after the devaluation of Iraqi dinar, the spokesperson for the ministry of planning told state media on Monday, announcing recovery plans to reduce it.
“After the dollar exchange rate rose, the inflation index rose by 4.9 to 5 percent, while the primary poverty indicators rose to between 26 and 27 percent,” Abdul Zahra al-Hindawi told Iraq’s al-Sabah newspaper on Monday.
The spokesperson added that the Ministry has “completed preparing a reform and recovery plan that responds to the challenges, taking into account the complicated crisis the country is facing, that is the economic crisis and the health crisis, what resulted in the increase of poverty rates, high prices and inflation.” The plan will be executed between 2021 to 2023.
According to Hindawi, at the beginning of the pandemic poverty rate increased to 31.7% but as the curfew lifted it led to a decrease to 25%, adding that the number of poor in Iraq is “less than 10 million.”
The ministry in January published that the population of Iraq has reached 40.1 million people, more than half of which are between the ages of 15 and 64 years old.
Iraq has been gripped by an economic crisis, exacerbated by a drop in oil prices and the global coronavirus pandemic, which has left many unemployed.
The country has almost exclusively relied on oil revenues since the US invasion in 2003. In June last year, Kadhimi stated that the country currently gets 94.7 percent of its income from oil sales.
Oil prices dramatically dropped because of reduced demand during the COVID-19 pandemic. Baghdad has had to borrow money to pay its civil sector and has introduced austerity measures cutting salaries and pensions, which sparked protests across Iraq.
The price of Brent crude oil hit $62 per barrel on February 13, the highest it has been since the global oil price crash of last year – which was good news for the Iraqi economy that is heavily dependent on oil.
The World Food Programme (WFP) representative in Iraq told state media on Thursday that “about 3 million people in Iraq suffer from insufficient food consumption.”
Iraq’s poverty rate stood at about 20 percent before the coronavirus pandemic – but the World Bank Group in November also estimated the poverty rate in Iraq will increase by seven to 14 percent, calling on Baghdad to introduce urgent economic reforms.
Iraqis entered the Muslim fasting month of Ramadan with a feeling of dread as they are faced with sharp price rises, a decline in the buying power of the dinar and rising unemployment.