IMF: 2% decrease in Iraq’s budget in 2015 of GDP

IMF: 2% decrease in Iraq’s budget in 2015 of GDP

December 31, 2014 14:52

IMF - 2 percent decrease in Iraqs budget in 2015 of GDP (Independent) … sent IMF mission held discussions with Mr. Hoshyar Zebari, Minister of Finance of Iraq and Mr. Zuhair Ali Akbar, deputy governor of the Central Bank of Iraq and a number of officials in the finance and planning ministries and the central bank to assess the latest economic developments in the country and discussions focused on the impact of the double trauma of Daash regulation and lower oil prices attacks at the end of the visit, Mr. Sdralvić issued the following statement:

IMF experts noted that it is expected that GDP in Iraq is reduced by about 0.5% this year, which is attributed in Muammh to the economic impacts of the attacks organization Daash: We estimate non-oil growth decline since the beginning of the conflict because of the destruction of infrastructure, and the obstacles to obtaining fuel and electricity, and low confidence of the business community, and the disruption of trade, on the contrary, given the concentration of most of the oil infrastructure in the south of the country and beyond the control of the Daash, however that the production of Iraq’s Kurdistan region in mind, we can expect the arrival of oil production to 3.3 million barrels per day in in 2014, up from 3.1 million barrels per day in 2013, with exports remain at levels recorded in 2013 and Balbalgh 2.5 million barrels per day.

In the next fair is expected to rebound to growth of approximately 2% with the increase in oil production and then oil exports, with the support of the central government spending, which reached recently with the Kurdistan Regional Government on Sardat oil from Kurdistan and Kirkuk oilfields.

The inflation calculated on an annual basis amounted to 0.9% at the end of October last year in the provinces of Iraq outside the conflict zones.

As for the exchange rate of the Central Bank kept linking the Iraqi dinar US dollar system, and narrowed the gap between the official exchange rate in the market and the budget until it reached 2.6% last September, thanks to the line taken by the central bank towards the liberalization of the foreign exchange market.

However, it has contributed to the increase in imports, coupled with the decline in oil Alaardat and lower government sales of foreign currency to the Central Bank to finance government spending, the decline in international reserves of more than $ 77 billion at the end of 2013 to about $ 67 billion by the end of November The government also used the Iraq Development Fund, which has been transferred its assets to the Central Bank, which contributed to the geode these balances of $ 6.5 billion at the end of 2013 to about 4 billion last November.

The government has expressed its commitment to submit the draft budget for 2015, the Iraqi parliament soon. The non-ratification by the Iraqi parliament on the budget in 2014 may cause the activation of a financial base reduced aside from spending in the current year, but spending from outside the budget, especially on security, caused an increase in the deficit, which is likely to be up to about 5% of GDP, Expert Group envoy from the Fund has been discussed with the Ministry of Finance and the challenges associated with the formulation of the public budget for the 2015 project, which Isthedm address the ongoing extraordinary spending big decline in oil prices under pressure, and because the expected funding will be limited in 2015, we expect that Infkhadd budget deficit to less than 2% of GDP.

The Fund will continue to support Iraq through Aelchorat on policies, and technical assistance and training will be in the coming months Gaddour discussions with the authorities in the context of Article IV of the 2015 consultations.

And Chtmama like the International Monetary Fund mission to thank the Iraqi Sultan for their cooperation and open discussion and fruitful. (END)