Economic expert Ziad al-Hashemi has criticized the Iraqi government’s move to seek financial support from the International Monetary Fund (IMF), questioning why the country is considering external borrowing after recently devaluing the Iraqi dinar.
In a post on Facebook on Saturday, al-Hashemi said the move appeared to contradict the government’s earlier explanation for changing the exchange rate. He noted that the dinar’s devaluation had been presented as a way to avoid more difficult financial measures, including borrowing from abroad.
Al-Hashemi argued that the government should explain why it is now considering IMF financing and what has changed since the exchange rate adjustment.
He also warned that an agreement with the IMF could come with conditions affecting public spending and government revenues. These could include reviewing subsidy policies, particularly those related to fuel and electricity, as well as other areas that place a heavy burden on the state budget.
“The government should have explained to citizens the nature of its move towards external borrowing and the reasons that prompted it to take this step, despite changing the dinar’s exchange rate just a few weeks ago,” al-Hashemi said.
He added that borrowing could place further pressure on Iraq’s fiscal policy. If an agreement is reached, recommendations included in the IMF program could become formal obligations tied to the loan’s terms and implementation.
Al-Hashemi’s comments have raised questions about the government’s financial strategy, particularly whether the recent exchange rate change has been sufficient to address budget pressures or whether additional financing will be needed. The potential impact of any IMF agreement would depend on its final terms and the measures Iraq agrees to implement.
