“International Monetary” demands Iraq to reduce spending on the electricity sector
“International Monetary” demands Iraq to reduce spending on the electricity sector
8/4/2019
The International Monetary Fund (IMF) has called on the Iraqi government to cut spending on the electric power sector as well as a comprehensive reform of the banking sector. The Central Bank of Iraq said in a statement on Sunday that the IMF “called for the opportunity to take advantage of improved security conditions and high oil prices, to implement policies and structural reforms, which ensure economic stability.”
On July 19, the IMF Executive Board concluded Article IV consultations with Iraq, indicating that current spending was expected to rise by 27 percent in 2019, year-on-year.
The IMF stressed that “the implementation of the reduction of subsidies to the electricity sector .. It is a priority in the control of spending, and protect the poorest and the least income from vulnerability to financial controls.”
The Iraqi government supports the electricity sector in the country, benefiting the various segments of society in the domestic and commercial categories.
On April 30, the Iraqi government signed a contract worth more than 14 billion euros with the German company Siemens to develop the electric power sector in the country.
Iraq has witnessed a deficit in the energy sector during the past years, despite the possession of reserves of oil and gas, which contributed to fuel public anger, especially in the south, last year.
In another context, the fund called on the Iraqi government “to undertake a comprehensive reform of the banking sector in order to maintain financial stability, through the restructuring of large banks owned by the state, and strengthen control.”
Article IV of the IMF Agreement provides for bilateral discussions with member countries on public finances, strengths and weaknesses, and mechanisms to improve economic indicators.
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