The International Monetary Fund (IMF) commends Iraq's actions by controlling spending

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The International Monetary Fund (IMF) commends Iraq's actions by controlling spending

Post  Admin on Sat Aug 19, 2017 8:15 pm

August 16, 2017 5:50 pm
Baghdad / Follow-up Zawra: 

The International Monetary Fund (IMF) commended the measures taken by the Iraqi government aimed at achieving comprehensive economic development through controlling and minimizing spending, encouraging investment and going to the private sector as well as serious steps towards maximizing non-oil revenues to avoid or reduce the budget deficit by moving away from total dependence on oil. 

However, through its indicators of the overall financial and economic situation in Iraq for the period from 2013 to 2022, the IMF revealed that Iraq's public debt reached 122.9 billion dollars, representing 63.8% of the gross domestic product. 

He expected the public debt to reach 132.4 in 2018 and continue according to the fund's expectations to reach 132.9 in 2022. 

On the sidelines of the conclusion of the IV Article IV Executive Board with Iraq, IFAD welcomed the policies set by the Iraqi Government to deal with the shocks of armed conflict with the organization of the terrorist advocate and the humanitarian crisis resulting from the waves of displacement and its aftermath, as well as the second shock of falling crude oil prices . 

The outlook for growth in Iraq is positive in the medium term. Growth will be driven by the moderate increase in oil production, the recovery of non-oil growth, supported by the expected improvement in security conditions, and the implementation of structural reform measures. 

CEOs applauded the fiscal year of 2016, albeit slower than the program, due to poor monitoring of investment spending and spending pressures imposed by the military crackdown on an advocacy organization and assistance to IDPs and refugees. 

Directors welcomed the achievement of most of this fiscal discipline by reducing inefficient capital spending while protecting social spending. 

The IMF pointed to the appropriateness of the government's procedures which were able to maintain the exchange rate system pegged to the US dollar. He stressed that with the central bank simplifying the documentation requirements, exchange rate differences compared to the parallel market narrowed to 6% in June 2017. 

In its assessment of the overall economic and financial situation in Iraq, the IMF said that although performance under the credit agreement was weak in some key areas, understandings were reached on corrective action to keep the program on track. 

Against this backdrop, they urged managers to persevere in implementing the authorities' program, including continued efforts to control public finances, strengthen the financial sector, implement structural reforms to encourage private sector activity and improve the business environment. 

To strengthen stability in the financial sector, managers urged the Iraqi government to take action to strengthen oversight and move forward with plans to restructure state-owned banks that control the banking system. 

They also urged them to strengthen the legal framework of the Central Bank, abolish the remaining restriction on exchange and practice multiple exchange rates, and accelerate the implementation of measures against money laundering, financing of terrorism and fighting corruption. 

Directors believed that the currency peg to the US dollar, which is the cornerstone of the economy, remains an appropriate system.
 They also urged the authorities to undertake a comprehensive reform of public finance management, including the completion of a regular inventory, payment of arrears and improved commitment to expenditure and cash management to prevent the accumulation of new arrears. 

The International Monetary Fund revealed through its indicators of the overall financial and economic conditions in Iraq for the period from 2013 to 2022 on the arrival of the volume of public debt to Iraq to 122.9 billion dollars, which constitutes 63.8% of gross domestic product, expected to reach public debt in 2018 to 132.4 and continue to The fund forecast to reach 132.9 in 2022.


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