Iraq remains in the international credit rating “b”. The risk of repayment of foreign currency debt is high

Iraq remains in the international credit rating “b”. The risk of repayment of foreign currency debt is high

Posted, July 31, 2018 10:52 pm

Iraq remains in the international credit rating b - The risk of repayment of foreign currency debt is highFitch Ratings International said on Monday it kept its rating of Iraq unchanged at B with a stable outlook.

Fitch said in a statement that it had confirmed its long-term risk rating for foreign currency debt default at ” B “, which means high risk.

The classification of Iraq was constrained by weak governance, high political risk and the uncooperative banking sector.

The Iraqi economy and its banking sector face risks associated with the political and security tensions that have plagued the country since 2003.

Fitch said that Iraq still faces political risks and insecurity among the highest levels faced by any sovereign body classified by the institution.

“This reflects not only political instability, but corruption and inefficiency of the government and weak institutions,” he added.

However, most of the oil production facilities and export infrastructure are located far from the areas that have the highest security risks, according to Fitch.

Iraq, the world’s second-largest oil exporter, relies on oil revenues to finance up to 90 percent of state spending.

Fitch added that high oil prices helped to reduce the budget deficit significantly last year, with the deficit shrinking to 2.3 percent of GDP from 13.9 percent in 2016, while the government will earn oil revenues much larger than was assumed in the budget for 2018.

aynaliraqnews.com