IMF: security spending to fight the “Daash” will affect the Iraqi economy
IMF: security spending to fight the “Daash” will affect the Iraqi economy
28-10-2014 07:13 AM
International Monetary Fund said Monday that the Iraqi economy will shrink by 2.7 percent this year, for the first time since the Western invasion of the country in 2003, after he dominated the organization of the so-called Islamic State (Daash) over large areas of Iraq.
The Fund says that this contraction is followed by growth of 4.2 percent in 2013, which in turn was the weakest since 2007.
But the expected contraction does not compare to the one that witnessed the Iraqi economy in 2003, when shrinking in size by 41.4 percent when the Americans and their allies invaded Iraq and occupied it.
The organization ‘Daash’ may be extended in Iraq rapidly in the last summer, without little resistance on the part of government forces, and now controls almost one-third of the area of Iraq.
These developments led to stop the growth of oil production, but also to shrinking production which is expected to not exceed 2.9 million barrels per day at the present time, while the volume of oil exports will remain close to its size in the last year (2.4 million barrels per day).
According to a report by the Fund that ‘growth in the gross national product, except the oil sector will be negative as well, compared to a growth of 7 percent in 2013 due to the negative impact of the military situation on the consumer and investor confidence, and its impact on fuel and electric power supply and the increase imposed on the transportation and distribution cost and its impact, which Extruder for investments. ‘
But the report said the growth rate is expected to rise to 5.1 percent in 2015, as a result of the rise in oil production, even if the fund cut its forecast for an increase of 5.6 million barrels per day to 4.2 million.
The IMF said that the Iraqi budget is under great pressure as a result of increased security spending and the cost of dealing with the humanitarian crisis caused by the expansion of the organization ‘Daash’.
ikhnews.com
