“It is not true.” An economic vision about the World Bank’s figures on Iraq’s public debt

“It is not true.” An economic vision about the World Bank’s figures on Iraq’s public debt

2023-08-21 | 02:19

It is not true - An economic vision about the World Banks figures on Iraqs public debtThe economist, Nabil Al-Marsoumi, presented an economic vision on the Central Bank’s figures regarding the volume of public debt in Iraq, while explaining the impact of the budget law on the volume of debt.
Al-Marsoumi said in a post, followed by Al-Sumaria News, that “theWorld Bank’s figures on public debt in Iraq are incorrect, which is that the public debt for the year 2023 amounts to 152 billion dollars, and the external debt amounts to 50 billion dollars, and the internal debt is 102 billion dollars. As for the ratio of public debt to the gross domestic product is equal to 58.3%.

He added, “These figures assume that the 2023 budget will be fully implemented, which will result in adding about $31 billion to the total public debt. It is expected that this budget will not be fully implemented, especially after its implementation was delayed until the current month of August, which casts doubts about the credibility of these numbers”.

Al-Marsoumi pointed out, “The external debt is onIraqWith the frozen Gulf debts amounting to 61 billion dollars, not 50 billion dollars, and after the implementation of the budget in full, it will become about 70 billion dollars.”

He added, “The internal debts amount to 70 trillion dinars, and when the budget is implemented, it will become 100 trillion dinars, or about 77 billion dollars, not 102 billion dollars.”

The legal expert explained that “the total public debt will be $138 billion if the budget is fully implemented, not $152 billion as the World Bank says.”

Earlier, the World Bank mentioned in the report issued on the economy inIraqAnd his debts, under the title: (Renewed Pressures: RecoveryIraqat risk) The “economyIraqIt suffers from stagnation in non-oil GDP, industries, and agricultural activities, which was accompanied by high inflation rates, as it lacksIraqUnder his current government; for large-scale structural reforms that strengthen its economy away from oil.”

And he indicated that “the annual budget approved by the government authorities witnesses a significant increase in the volume of public expenditures by 59% over the previous year, which represents 74.3% of total expenditures, which will lead to a large fiscal deficit of 51.6 trillion Iraqi dinars – equivalent to 39.7 billion dollars – which represents 14.3% of the volume of public imports, or more than half of the recent record reserves that were accumulated in the wake of the boom in oil prices. And on the policies of the (Central Bank) in devaluing the local currency

, The World Bank stated that “the devaluation of the Iraqi dinar led to an increase in headline and core inflation, due to the heavy dependence on import operations in light of the weak domestic production that is not supported by government authorities, which exposed the country’s fragile economy.”

The World Bank report added that “the standards of transactions adopted by the (Central Bank) through auctions for the sale of currency; caused the redirection of hard currency to the parallel market, which caused a decrease in the value of the dinar against the dollar.”

According to the World Bank, “lack ofIraqTo diversify sources of income due to the chaotic policies of successive governments, this led to a contraction of the gross domestic product by 1.1%, in 2023, and an increase in the country’s public debt to reach 58.3%, after it was 53.8% in the previous year, i.e. it will reach 152 billion dollars, an increase of 10 billion dollars, while The total external debt amounted to 50 billion dollars, and the internal debt to 102 billion dollars, which means that the government authorities borrowed in the previous three years internally about 60 billion dollars, at a rate of 15 billion annually, and with annual interest on internal debts of 16 to 17% of the volume of debt

. Bank, the “economic future prospects inIraqstill exposed to great risks; Because of the excessive dependence on oil, which makes it vulnerable to shocks in oil markets and global demand, as evidenced by the recent decline in oil prices, in addition to the factors driving fragility that pose basic challenges to the economy, such as widespread corruption, poor service delivery and infrastructure development, and security risks.

The World Bank added that “the continuation of the government authorities in pursuing these policies will make the country’s budget in favor of the political parties that have delayed the wheel of development and made it suffer from major imbalances despite the passage of two decades of allegations of the end of the war.”