Iraq Economic News and Points To Ponder Monday Morning  6-23-25

Economist Warns Of Recession Signs: Low Inflation Is A Warning Bell

Economy 20-06-2025, 12:13 | 514  Baghdad Today – Baghdad  Economic expert Munir Al-Obaidi warned on Friday (June 20, 2025) of signs of recession that could turn into a broader crisis affecting the Iraqi economy,  indicating that the decline in inflation is a warning bell for the recession phase.

Al-Obaidi said in a post on his Facebook page, which was followed by Baghdad Today:
 
“The Iraqi Statistical Authority announced a decline in the country’s monthly inflation rate by 0.3% during the month of April, while the annual  general inflation rate recorded 1.6%, and  core inflation 0.6%.”  

He added, “It is noteworthy that food prices continued to rise by 3.2% annually, despite declines in the prices of bread, meat, and fish.
 
This is due to sharp increases in the prices of fruits and vegetables, which rose by 13.7% and 8.4%, respectively.”  He pointed out that, “In contrast, tobacco prices declined by a significant 26%, while
clothing and footwear prices saw a slight annual increase of 2%.
 
Household appliances recorded a 1% decline, while furniture and office equipment prices rose by 0.5%.”  He pointed out that “in terms of geographical distribution, the annual inflation rates, by region, were  1.1% in Kurdistan,  1.4% in the central governorates, and  3.1% in the southern governorates.”

Al-Obaidi explained that “the decline in prices, despite its positive impact on citizens, especially in sectors such as electrical appliances and furniture, may reflect a state of stagnation in the market,
as a result of   weak consumer confidence,  lack of liquidity, and a  decline in financing provided to the private sector, especially with the  weakness of insurance services provided by financial institutions.”  

He indicated that “although the decline in inflation may appear to be a positive indicator, it may also be an alarm bell for a phase of recession, threatening to  reduce job opportunities in the private sector and
 weaken the ability of local products to compete due to rising costs, which may lead to further pressure on the government sector in light of the high unemployment rates.”

 He continued, “What is required today is to closely monitor economic indicators and take serious steps to stimulate economic activity and support the private sector, so that signs of recession do not turn into a broader crisis that affects the entire Iraqi economy.”    https://baghdadtoday.news/276915-.html

The Central Bank Participates In A Workshop On Governance And Compliance In The Field Of Money Laundering And Terrorist Financing.
 
June 22, 2025 The Central Bank of Iraq‘s Mosul branch participated in the “Governance and  Compliance in the Field of Money Laundering and Terrorist Financing” workshop, organized by Rashid Bank in Mosul Governorate.
 
The workshop emphasized the need to  enhance employees’ and officials’ understanding of the importance of  anti-corruption,  money laundering, and  terrorist financing measures, as well as to  implement local and international best practices in this area.

The workshop sought to highlight the importance of enhancing the bank’s role through  financial inclusion initiatives and providing the best banking services to citizens.    
Central Bank of Iraq    Media Office    June 22, 2025   https://cbi.iq/news/view/2914 

Public Debt Challenges
 
Economic 06/23/2025  Yasser Al-Mutawali Public debt, in all its forms and varieties, whether external or domestic, is one of the most complex challenges facing countries,  especially developing countries and even those poised for growth.
 
One of the most prominent policies of   international capitalist institutions and banks is to  drown countries in foreign debt with the aim of  dominating and controlling them and  containing their economies (economic colonialism) or (economic monopoly), call it what you will, including some multilateral financial institutions,  by imposing on borrowing countries firm reforms that appear to improve the economic situation but in reality make their economies completely subservient to the wills and policies of the countries.
 
Perhaps the public (external) debt is a double-edged sword  for those who do not invest it well in   developing economic sectors and  achieving development that leads to stability.
 
If the public debt is for consumer spending purposes, then this is where the ultimate disaster occurs.
 
This policy pursued by international institutions has created a sense of international frustration,
particularly with the use of debt as a weapon against countries and the imposition of binding sanctions.
 
Therefore, you find that most countries, especially the superpowers, are at the forefront of those seeking an alternative to the dollar as a unit of measurement for  trade transactions,  debts, stocks, and  bonds.
 
I was once struck by a statement made by someone, from an economic analysis perspective, that the 
incurrence of domestic debt has no impact on the financial situation, which is truly surprising.
 
Public (domestic) debt is sometimes worse than external public debt,  especially if it is used outside budget allocations or purposes, such as  political purposes or for  liquidity purposes to cover excessive operating expenses, etc.
 
This debt often relies on foreign exchange reserves, which erode them. 
This poses a risk of accelerating financial crises.
 
Domestic public debt increases the budget deficit,  which in turn impacts  inflation rates,  rising prices, and a  lack of liquidity.
 
This highlights the eternal contradiction and overlap between monetary and fiscal policies.
 
While monetary policy seeks to reduce annual inflation growth rates and increase foreign exchange reserves, fiscal policy implements government policies that contribute to government spending,
which sometimes intersects with the goal of monetary stability.
 
This imbalance in our experience in Iraq may be due to the absence of sovereign funds that would     balance these two policies and  achieve their developmental and financial stability objectives.
 
Therefore, the monetary authority needs efficient management to     achieve financial and monetary stability and thus   economic stability on an ongoing basis.     https://alsabaah.iq/116419-.html  

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