5 million Iraqis will be eaten by the "burning dollar": great damage that increases and 3 years between Iraq and the "return of the economic recovery"!

5 million Iraqis will be eaten by the "burning dollar": great damage that increases and 3 years between Iraq and the "return of the economic recovery"!
2021-02-15

Yes Iraq - Baghdad

The devaluation of the dinar against the dollar is reflected negatively on the livelihood of the Iraqis in the last three months, as this has led to an increase in the prices of food, construction and clothing, especially since more than 90 percent of consumer goods in the local market are imported from abroad, and the government pays its value in US currency .

At the end of last year, the Iraqi government raised the exchange rate of the dollar from about 1200 to 1448 dinars, in order for it to reduce the gap between imports in hard currency from selling oil and what it spends on the country's operating budget, as Iraq sells oil worth about $ 3.4 billion a month, including The equivalent of four trillion dinars, a number that is not sufficient to pay employees' salaries, which amount to about 6 trillion dinars per month.

On the other hand, the majority of Iraqis who live in difficult economic conditions have paid the price for the decline of their currency, which is reflected in the price of basic goods and services.

Faced with this difficult situation, the government is unable to provide basic commodities such as food and other at prices that match the citizen’s income. A member of the Iraqi parliament, Ali Al-Badiri commented on this point, saying, “When the Iraqi authorities sought to get out of the financial crisis by raising the value of the dollar against the dinar, it occurred. In a second crisis, which is the deterioration of the citizens ’purchasing power, the signs of an economic crisis are looming on the horizon, and the government must assume its responsibilities.

He explained that "the rise in the exchange rate of the dollar against the dinar has greatly affected the prices of goods in the market, especially imported consumer goods, and this matter we do not know whether the government has studied it or not, but it says it is pursuing traders who took advantage of the crisis and raised the prices of materials, and it also started During the past weeks, the promotion of the national product.

For his part, the economic expert, Abdul Rahman Al-Mashhadani, confirmed, in statements monitored by "Yis Iraq," that "Iraqis have already suffered since the outbreak of the Corona virus, from great economic problems, due to the collapse of oil prices that led to the threat of employees' salaries."

He added that "the government has not been able to solve the problems of the poor, who are in the millions, and the Ministry of Planning has a comprehensive census and perception about them," explaining, "The number of Iraqis is more than 40 million people, and there are 5 million of them employees, and this means that the largest proportion of Iraqis are constantly affected." Of financial crises ”.

Iraq relies on its revenues from oil sales to cover 95 percent of state expenditures, according to official data. Earlier, the government approved the 2021 budget at a value of 150 trillion dinars (about 103 billion dollars), with a total deficit of 63 trillion dinars (about 43 billion dollars).

On the other hand, the International Monetary Fund stated that Iraq's economy, which shrank by 11% last year due to the measures to ban the Corona epidemic and the sharp decline in oil price revenues, is hoped to return to pre-pandemic levels by the year 2024.

"The slowdown in real GDP reflects a decrease in non-oil activity and a reduction in crude oil production due to compliance with OPEC Plus decisions," the fund said in a statement carried by The National.

He added, "The large fiscal deficit of 20% of the gross domestic product, as well as the external current account deficit of 16% of the GDP, have restricted the government's ability to propose an effective financial treatment for the crisis."

The International Monetary Fund stressed, "The importance of fighting corruption in the main public institutions and restructuring the huge government banks in order to enhance financial stability and develop the private sector."

Based on the Fund’s expectations, by relying on these efforts, “It is expected that Iraq's economy will gradually recover and grow by 1.2% and 3.9% in 2021 and 2022, respectively. The growth rate of Iraq's economy in 2019 was 4.5%.

He pointed out that "it is expected that the real GDP will return to the pre-pandemic level by the year 2024, and that the fiscal deficit and the external current account will decline in the medium term."

And he indicated, "It is expected that both the fiscal deficit and the external current account will decrease over the medium term, while the rate of government debt is expected to reach its highest level in 2023 and then gradually decline after that."

On the other hand, the Fund stated that "the political turmoil and convulsions that precede the parliamentary elections and renew periods of instability, which would undermine and impede reform efforts."

Iraq had begun to take steps described as necessary towards ensuring future economic stability.

In December, the central bank reduced the currency’s value against the dollar by 23%, a step through which the fund is expected to help reduce external imbalances and preserve reserves of hard currency.




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