Parliamentary Finance: the issuance of international bonds will revive the economy for a limited period

02/09/2015 (00:01 pm)



BAGHDAD / Noor Ali

Parliamentary Finance Committee predicted, on Tuesday, the recovery of the Iraqi economy, by the international issuance of bonds worth $ 6 billion, saying it is one of the ways employed by States when the collapse of its economy, as economists student be attached to the budget tables cash flow of local and foreign currency, confirmed that the amount of 6 billion dinars for Aestday reservation.


He said the parliamentary finance committee member Sarhan Sylvana in an interview with the "long" that "this step of the steps set forth in the budget No. 2 of 2015 Act, and that the issuance of international bonds one of the ways to address the shortfall in the budget of 25 trillion dinars, but now and in the With the decline in oil prices, I believe that the deficit ratio of up to 50 trillion dinars. "

He added that "This move could revive the Iraqi economy for a limited period until the stability of oil prices in world markets, and added," for the purpose of the shortfall in the budget of 2015 treatment, we released the internal and external bonds, and the last is the best, because the demand for internal bonds by the citizens weak , but did not get to the level we desire. "

He said Sylvana that "issuance of international bonds, will show a negative impact in the long term and not short, and that future generations over the next 20 years will bear these expenses that will address the current economic situation, which is a topical treatment."

Government revenues have fallen with the drop in oil prices at a time when Iraq is waging an expensive military campaign to organize Daash in the northern and western its provinces, which resulted in a potential deficit estimated at 25 trillion Iraqi dinars ($ 21.4 billion).

For his part, says economic expert, Dr. Ahmed Abrihi, in an interview with the "long" that "the amount of $ 6 billion is not large, compared to the size of the Iraqi economy, and the potential size of the oil revenue in normal circumstances, and this is to Aestday reservation".

"But if he can borrow from abroad great, when it should be the reservation, because he is not permitted to encumber the extra budget commitments, especially since oil supplier wobbling."

"The amount of borrowing $ 6 billion will allow more foreign currency to the Ministry of Finance, and could become the largest amount of selling them to the Central Bank, which supports the latter reserves indirectly."

He noted that "the need for religion need to reduce foreign currency inflows, he has personally demanded that encloses the House of Representatives in the general budget table showing the cash flow home and abroad of foreign currency, and the balance of foreign currency attached to the general budget."

He noted that "this will show how the balance will enter Iraq from foreign currency, and how much will come out of them, and the amount the government needs them as well, how much enters from oil and other sources of revenue," and expressed regret that the application of this method. "

He added by saying that "the absence of this table which shows the internal and external flow of foreign currency, can not appreciate the need to accurately borrowing, calling for the House of Representatives in the next year that the budget attached to this table, and on the basis of this table is estimating religion from home and abroad."

The Finance Minister Hoshyar Zebari (4 March 2015) that Iraq is considering several options to overcome the fiscal deficit, which is currently suffering from it, and these options to borrow from government banks and issuing six billion dollars worth of loans, bonds, in agreement with international banks.

Zebari said that the ministry is looking for ways to cover the fiscal deficit by several means, "noting that among that" the issuance of bonds or borrowing from state banks and the conversion of part of the assets deposited in the Central Bank to loans worth bonds six billion agreement with Deutsche Bank and the German City American Bank. "

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