Allawi: The economic crisis we face is worse than 2006
Allawi: The economic crisis we face is worse than 2006
6/23/2020 14:01
[Baghdad_Eye]
Finance Minister Ali Allawi, on Tuesday, warned that the Iraqi economy may face “shocks that we will not be able to deal with” unless reform measures are adopted in less than a year.
Allawi said in an interview with Agence France-Presse, if we do not adjust matters during this year, we may face shocks that we will not be able to deal with.
Allawi, who was also finance minister during the transitional government’s period between 2005 and 2006, indicated that the situation today is “worse” because Baghdad faces an “existential economic situation”.
At that point, the price of a barrel of oil was approximately $ 35, but the number of state employees was less than a million.
Today there are more than four million employees, and many other Iraqis who are paid salaries and pensions. This means a monthly sum of between four and five billion dollars.
With one out of every five Iraqis receiving government aid, the bill becomes heavier for the country that depends on paying all its expenditures on oil whose prices collapsed months ago with a severe shortage of demand for it.
According to Allawi, the government must pay the salaries of June and July, on time, by borrowing from government banks.
Allawi warned that these measures are possible for a short period, otherwise “it will affect the price structure, and consequently on inflation, which will in turn affect the exchange rate and the reserve in the central bank.”
alliraqnews.com
