Iraqi economy and the crisis of international confidence
Sunday 11/22/2015 0:11
Adnan decent / Baghdad news
despite the need for Iraq's urgent to get foreign loans to cover the deficit accumulated financial in annual Moisnath, including the 2016 budget, in which a total of over $ 50 billion, is Finance Minister Hoshyar Zebari to stop the issuance of international bonds in stages in sizes up to six billion dollars, because of the high cost, including carrying a treasury Baghdad heavy financial burdens. The Zebari decision at a time when Iraq faces an international crisis of confidence as a result of the deterioration of its financial situation and declining credit ratings from international rating agencies, although it is oil country rich and the owner of the fifth reserve in the world, and the second producer within OPEC after Saudi Arabia, and reached its production during the current year to about four million barrels a day, knowing that his future plans are looking to double production to eight million barrels between 2020 and 2030. proved the ten-year period since the start of the US occupation and the overthrow of Saddam Hussein's regime until the end 2013, Iraqis' ability to adapt to the security and political developments, noting that Iraq's record in 2013 a record economic growth of Nhotsah percent, according to the International Monetary Fund, due of course to its oil production, which enabled him to put its budget for 2014, amounting to $ 150 billion, the highest budget in its history on the basis of calculation of $ 90 to the price of the barrel. But with the decline in oil prices and a decline in revenues by more than 50 percent, reducing Iraq breakeven price per barrel in the budget of 2015 times, from 90 to $ 70, then $ 56, and the estimated budget for 102 billion dollars with a deficit of about $ 21.4 billion, the deficit of sources, including loans from the IMF and the World Bank, and the issuance of international and local bonds contributed by Iraqi banks plugging. The budget of 2016 approved by the Council of Ministers on 18 October this, reaching 106 trillion dinars (90.9 billion dollars) and a deficit equivalent to $ 19.7 billion, and the roof of the export of oil is equal to 3.6 million barrels per day at my guess at $ 45 a barrel, but experts have advised the government to cut the price to $ 40, and the most pessimistic to $ 35, which in turn accumulate fiscal deficit for Iraq , and increases the liquidity experienced by the crisis, in the face of rising losses resulting from the security situation and the war with Daash which controls large areas and take advantage of its resources and stealing government funds, as well as to afford the salaries of more than five million employees in the State, and a large Hoadd unparalleled in countries Iraq outweigh the populous. All these negative developments with the continued corruption that caused squandering nearly a trillion dollars over ten years (2004 - 2014), contributing to the destabilization of international confidence in the Iraqi regime financial and economic deteriorating conditions, and therefore the high cost of treasury bonds in global financial markets. This is confirmed by international agencies credit rating, including agency Standard & Poor's sovereign debt to Iraq degree B-, in a report released in 3 last September, stressing that Iraq is facing renewed threats to the security level institutions, is the highest among all sovereign countries that are being straightened, especially because of his war against Daash, but the agency noted that Iraq has huge reserves and has substantial oil exports, reducing fears in this area, so attached to the rating prospects of stable, arguing that the country's growth will remain steady in the medium term because of a significant increase in oil production will ease the budget pressure . If Zebari ordered a halt to international bond issuance, it may be temporary, pending the efforts being undertaken to convince the global investment funds and bank managers subscribed in bonds, on the basis of that classification low does not meet the ambitions, but it may be considered the starting point of financial development, and encourages Iraq to take steps banking reform and to improve the serious economic outlook. And Hoohar to step to the World Bank Nhotkadim total loans worth $ 1.7 billion, and the adoption of the IMF agreement to the program of loans worth 83.3 million dollars, what contributes to the strengthening of the international confidence and encourage investors to respond to the Iraqi bonds. In spite of Iraqi banks warning of a liquidity crisis exposed as a result of challenges faced by the central bank goes on to finance the budget loan of six trillion dinars run through 50 percent of the deposited by commercial banks reserves has, and the repurchase of treasury bonds from the secondary market, as buying Nhokhmsh trillion dinars, of which a first stage, note that these measures do not affecting the private reserve has estimated at $ 70 billion. remains to note that the Iraqi public debt is still acceptable, and Hobaid for international risk standards, and has according to the latest statistics about $ 37 billion and constitute 36 percent of the gross domestic product, while the golden rule in accordance with the Maastricht Treaty determine the rate of 60 percent for the debt ratio to gross domestic product, and notes that a small number of EU countries, is committed to this standard, as the rate is 175 percent in Greece, and about 93.5 percent in both France and Spain, and to rise to 123 percent in Ireland and to 129.5 percent in Portugal, note that the external debt of Iraq is not great, as it is only about $ 15.5 billion, out of public debt.
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