Stable outlook for Iraq’s credit rating for local and foreign operations
Stable outlook for Iraq’s credit rating for local and foreign operations
2025-02-08
Shafaq News/ Standard & Poor’s credit rating agency maintained Iraq’s credit rating for local and foreign currencies for the long and short term at “B-/B” with a stable outlook.
This came as Iraq’s foreign exchange reserves continued to exceed debt service obligations over the next 12 months, despite the significant risks arising from instability, weak institutional framework, and lack of economic diversification.
The agency said that Iraq’s credit rating may be raised if higher-than-expected GDP growth, perhaps from renewed reconstruction efforts, boosts real growth and GDP per capita, and supports fiscal and external indicators.
The Iraqi government is betting on achieving economic development by pumping $100 billion over 3 years into infrastructure and industrial projects in different regions of the country. At the same time, some doubt the possibility of implementing the strategy on the ground, as it has been repeatedly discussed in recent years to no avail.
Banking sector reform
The Iraqi government, in cooperation with the Central Bank, launched a comprehensive reform initiative aimed at modernizing the banking sector and enhancing its efficiency to keep pace with international standards.
This step aims to achieve a strategic transformation in the financial system, by improving governance, enhancing transparency, and developing the banking infrastructure, which contributes to supporting economic development and opening new horizons for global financial partnerships.
shafaq.com
