In TNT 

Tishwash: An international report: The Iraqi economy experienced its worst downturn since 2003

A report by the Institute of International Finance revealed that last year Iraq went through the worst rate of contraction since 2003, reaching 11.2 percent, as the country dealt with two double shocks represented by the drop in oil prices and the spread of the Corona virus, but despite this, the output is expected to grow Oil GDP is 1.6% this year, and non-oil GDP is 3.1%.

The British newspaper, The National, quoted the Institute’s chief economist, Garbis Iradian, as saying in the report, which was translated by Al-Maaloumah Agency, that “the factors of low prices and the spread of the epidemic, along with the continuing political instability in the country, have led to the swelling of the Iraqi budget deficit to 15.6 percent of GDP. Total in 2020, and a sharp decline in its official reserves.

He added, “However, there is a slight recovery in oil prices, and the recent devaluation of the Iraqi dinar may put the country’s finances on a more sustainable basis.”

According to the Institute of Finance report, “There is an expectation that the deficit will shrink from 16 percent of GDP in 2020 to 8 percent in 2021 if the average oil price is 47 dollars a barrel and less than 1 percent if the average oil price is 57 dollars a barrel in a year. 2021 ″.

It is clear that “one of the indications of an improvement in the economy is an increase in the proportion of spending to 10 percent in 2021, driven by the recovery of capital spending, which decreased by half in the year 2020, indicating that“ more public investment is needed to reform the infrastructure destroyed by the war and strengthen The provision of basic public services, including the electricity sector.

The report stated that “current spending needs to be reoriented towards target sectors such as health, and to a lesser extent on wages and pensions, which represent 65% of total spending,” indicating that “in the context of long-running low oil prices, if spending remains on wages and pensions. “The fiscal deficit will remain large and the government will not be able to allocate additional resources necessary for spending on infrastructure and health.

The report stated that “rampant corruption, a weak regulatory framework, and a poor business environment still impede private sector development, job creation, and increased foreign direct investment flows, while the unfavorable classification of Iraq came to an equal extent in the Doing Business report issued by the World Bank. Iraq solution Ranked 171 out of 190 countries, it is also a problem and reflects “great difficulties for companies to obtain credit, access to electricity and trade, and to protect their rights in court.”   link