The International Monetary Fund warns Iraq of declines in oil prices
The International Monetary Fund warns Iraq of declines in oil prices
2024-03-03 02:19
Shafaq News/ The International Monetary Fund said on Sunday that Iraq must increase its non-oil exports and enhance government revenues, to reduce the economy’s exposure to oil price shocks, according to the Fund’s new recommendations.
The Fund warned, in a report issued today, and seen by Shafaq News Agency, that greater declines in oil prices, or extending OPEC+ production cuts, may affect Iraq’s financial and external accounts. While he believed that the country should focus on achieving higher and more sustainable non-oil growth to accommodate the rapidly growing workforce.
The Fund’s statement came at the conclusion of its mission’s visit to the Jordanian capital, Amman, and a meeting with the Iraqi authorities from February 20 to 29, to conduct Article Four consultations for the year 2024.
Several bodies raised their expectations for oil prices this year, including Bloomberg Intelligence, which saw that any escalation of the conflict in the Middle East would push the price to above $100, after it had previously estimated that the average price this year would reach $80, while Goldman Sachs raised He estimates prices will peak at $87 a barrel in the summer, $2 more than his previous estimate.
The Fund estimated Iraq’s real non-oil GDP growth at 6% in 2023 after declining in 2022, while the headline inflation rate fell from a high level of 7.5% in January 2023 to 4% by the end of the year.
The Iraqi Ministry of Finance said on February 29 that the International Monetary Fund had indicated a “significant decline” in inflation rates, which was reflected in the decline in food and energy prices in addition to the stability of the foreign exchange market in Iraq, according to what the Ministry of Finance announced.
An Iraqi delegation held discussions with the Article IV mission of International Monetary Fund experts in Amman, during which the implementation of the economic reform program and the improvements achieved by the Iraqi government in the field of development infrastructure, financial sustainability and maximizing non-oil revenues were reviewed, according to a statement issued by the Iraqi Finance Ministry at the end of February. .
It is noteworthy that Article IV consultations are bilateral meetings held annually between the International Monetary Fund and member states, after which a team of Fund experts meets the member country and conducts formal consultations with its officials.
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