Iraq Economic News and Points to Ponder Tuesday AM 5-21-24


Iraq Economic News and Points to Ponder Tuesday AM 5-21-24

The International Monetary Fund: It Is Expected That Iraq’s Economy Will Recover By 5.3% For The Year 2024-2025

Posted On05-21-2024 By Sotaliraq  Translated by / Hamed Ahmed  The International Monetary Fund indicated in its latest report that there are expectations for an economic recovery in Iraq for the year 2024-2025, reaching a rate of 5.3% before gradually stabilizing at a rate of 3.5% in the medium term, warning at the same time that the economic situation in general is fragile and that without action Economic and financial reforms regarding spending. This growth is vulnerable to decline if oil prices fall.

The Executive Board of the International Monetary Fund stated in its report issued on May 16, 2024, that local stability has improved further since the new government took office in October 2022, which facilitated the passage of the first three-year budget in Iraq, which led to a huge financial expansion starting in 2023. This supported a strong recovery in Iraq’s non-oil economy after a contraction in 2022, and a decline in inflation by the end of 2023 by 4%.

However, Fund experts point out that the economic situation in Iraq is still fragile, as its non-oil imports and exports constitute only a small portion of the gross domestic product, making that country vulnerable to major fluctuations in oil prices.

On the other hand, the public sector is still dominant in the arena, compared to a decline in private sector development procedures for reasons related to cases of corruption and bureaucracy, as well as dilapidated infrastructure and difficulty obtaining credit, and unemployment rates are still high, especially among the youth segment, stressing the necessity of taking reform measures. Economic and financial.

The International Monetary Fund expected the growth and recovery of the gross domestic product in Iraq for the year 2024-2025, driven by improved oil production rates and financial expansion, indicating its growth by 1.4% in the year 2024, expecting the country’s gross domestic product growth rates to increase to reach 5.3% in the year 2025 before stabilizing. In the medium term, gradually at a rate of 3.5%.

While Fund experts pointed out that the risks of a decline in oil prices and an increase in OPEC+ demands to reduce production would cast a shadow on the growth rate and increase pressure on external debt, stressing the necessity of taking radical economic and financial structural reform measures to ensure continued financial and financial stability.

External debt and the necessity of developing the aspect of diversifying the sources of the economy and achieving stable and comprehensive growth for the private sector.

The Fund’s experts recommend encouraging the Iraqi authorities to focus their control on public spending lists and mobilizing non-oil revenues, with the necessity of making reforms in controlling customs port resources and restricting excessive public expenditures to achieve a financial settlement while reforming the financial aid and retirement system.

The Fund’s experts also recommended the need to restrict the Central Bank’s financial policy efforts and strengthen the monetary liquidity policy framework, noting that improving coordination between financial and monetary operations will help absorb the increase in liquidity and enhance the financial transfer policy.

They also stressed the need to restructure banks and government banks, encourage the modernization of the private banking sector, and facilitate the establishment of mutual banking relationships.

The report states that developing the private sector and diversifying the sources of the economy are essential factors to ensure long-term financial stability and enhance job creation. This requires comprehensive reform of the private market aimed at improving society’s capital and improving the environment for private commercial activities, including reforming the electricity sector and combating corruption.

The experts stressed the need to enhance the development of the private sector and develop economic diversification to address the long-term unemployment crisis and confront any future economic challenges.

As it is expected that the rate of the number of people entering working age will increase rapidly, adding 0.8% of the labor force entering the market annually, which requires a growth in the gross domestic product at a rate of 5% for the next ten years to be able to absorb this growth in the labor force and reduce the unemployment rate. To one degree.    LINK

The Acquisition Of The Currency Window Opens The Appetite Of “Jordan National Bank” To Open A “Digital Bank”

Economy  05-21-2024 | 2,526 views  Alsumaria News – Economy  After a member of the Parliamentary Integrity Committee, Alia Nassif, announced that the Jordan National Bank is one of a group of banks in the process of obtaining a license to open a “digital bank” without a headquarters in Iraq, it seems that the Jordanian Bank was not satisfied with its “takeover” of the currency selling window. According to experts in the economic field.

Representative Alia Nassif said in a statement received by Al-Sumaria News, “7 licenses will be issued for digital banks, or the so-called environmentally friendly green bank, which are banks that do not have headquarters (one of which is affiliated with the Jordan National Bank).”

Nassif added, “This wrong step comes at a time when the banking sector in Iraq is suffering from an increase in banks. The service provided by digital banks could have been added to Iraqi banks instead of granting licenses to unknown banks without headquarters and without capital.”

For his part, economic expert Duraid Al-Anazi said in an interview with Al-Sumaria News, “The Jordan National Bank has internal and external privileges and extensive relations and correspondents, and it took advantage of the weakness of Iraqi banks in this aspect by seizing the largest part of the currency selling window,” indicating that “the central bank is incapable.” About finding a solution to this process because of the risks it poses.”

Al-Enezi added, “These risks are represented by the fact that the transfers that go out from the Central Bank to the Jordanian Bank are unsafe if it is subjected to any external accounting, because Iraq does not have any control over it as a foreign bank.”   LINK

The Presidency Of The House Of Representatives Receives The 2024 Budget

Iraq  Tuesday, May 21, 2024 12:52 PM   Baghdad/National News Center

Today, Tuesday, the House of Representatives announced that it had received the federal general budget schedules for the current year, 2024, from the government.

The Secretary-General of the House of Representatives, Safwan Bashir Al-Jarjari, said in a statement received by the National News Centre, that “the 2024 budget tables have been received from the government.”   Al-Jarjari added, “The tables have been referred to the Presidency of the House of Representatives.”

The Deputy Secretary-General of the Council of Ministers discusses with the Regional Director of the World Bank Indicators For Improving The Business Environment And Supporting The Private Sector In Iraq

Tuesday 21, May 2024 11:19 | Economical Number of readings: 259  Baghdad / NINA / Deputy Secretary-General of the Council of Ministers, Dr. Farhad Nimatullah Hussein, discussed with the Regional Director for Equitable Growth, Finance and Institutions for the Middle East and North Africa at the World Bank, Muhammad Nader, and his accompanying delegation, indicators of improving the business environment, and supporting the files of digital transformation and the banking sector in Iraq. .

According to a statement, the Deputy Secretary-General of the Council of Ministers confirmed to the Council that the Prime Minister’s government program focused on supporting the private sector by improving the business environment and simplifying procedures in various fields, given the importance of this vital sector and the necessity of multiple sources of income in Iraq.

He pointed out: “The committee for improving the business environment was formed at the highest level of the government and concerned sectoral bodies, and within the business environment and the support of the private sector, it completed many works that contributed to addressing the obstacles facing this sector, most notably: amending the companies law, the tax law, and issuing a law.”

 New insolvency issues, in addition to simplifying procedures for issuing construction permits, facilitating the registration of companies and establishing a single window, and supporting and encouraging foreign investments in Iraq.

The Deputy Secretary-General called on representatives of the World Bank to provide support and assistance in the areas of developing the work of the banking sector, digital transformation and electronic governance. And supporting investment and reform of state-owned companies.

For his part, the Regional Director for the Middle East and North Africa at the World Bank indicated that the Bank is a key partner in supporting Iraq’s aspirations, to improve the business environment and implement strategic plans and programs to develop the private and financial sector and support digital transformation in Iraq, stressing that Iraq is one of the leading countries and the first country within the Middle East region to fully work and implement processes to improve the business environment that would increase investments in Iraq./End3

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Provoking Thoughts and Points to Ponder on Money

Be the business never so painful, you may have it done for money.  – Thomas Fuller

But then one is always excited by descriptions of money changing hands. It’s much more fundamental than sex.  – Nigel Dennis

God makes, and apparel shapes: but it’s money that finishes the man.  – Thomas Fuller

If a man has money, it is usually a sign too, that he knows how to take care of it; don’t imagine his money is easy to get simply because he has plenty of it.  – Edgar Watson Howe

Interest works night and day in fair weather and in foul. It gnaws at a man’s substance with invisible teeth.  – Henry Ward Beecher