SECTION: SLIDE NEWS AUGUST 12, 2017
BAGHDAD (Reuters) - The International Monetary Fund (IMF) Executive Council concluded on Saturday the fourth article of the IMF's list with Iraq, under which the Iraqi economy is evaluated, calling on Iraq to fight corruption and share its budget with the Kurdistan region.
"The outlook for growth is positive over the medium term, and growth will be driven by the moderate increase in oil production, the recovery of non-oil growth, supported by the expected improvement in the security situation, and the implementation of structural reform measures," the IMF said in a statement received by Al-Baghdadiya News. , But the risks are still very high, mainly due to volatile security conditions, political tensions and weak implementation of policies.
The fund supports Iraq through its three-year standby credit facility of SDR 3.831 million (US $ 5.380 billion), equivalent to 230% of its membership.
The Executive Directors agreed on the overall line of assessment of the Fund's experts, welcoming the policies set by the authorities to deal with the shocks of armed conflict with the Dahesh organization and the ensuing humanitarian crisis and falling oil prices.
"The outlook for growth is likely to be positive in the medium term, but medium-term prospects are still surrounded by significant risks, mainly due to volatile oil prices, security instability, political tensions and weak management capacity," the statement said.
"Although the performance under the credit readiness agreement has been weak in some key areas, understandings have been reached on corrective action to keep the program on track," the statement said.
"In this context, they urged managers to persevere in implementing the authorities' program, including continued efforts to control public finances, strengthen the financial sector, implement structural reforms to encourage private sector activity and improve the business environment."
Directors pointed to "fiscal discipline achieved in 2016, albeit slower than in the program due to poor monitoring of investment spending and spending pressures imposed by the military campaign against a sympathetic organization and assistance to internally displaced persons and refugees."
To strengthen stability in the financial sector, the directors urged the authorities to "take measures to strengthen supervision, move ahead with the restructuring of state-owned banks that control the banking system, and strengthen the central bank's legal framework, , Accelerating the implementation of measures to combat money laundering, financing of terrorism and combating corruption. "
"The system of pegging the dollar to the US dollar, which is a pillar of the economy, remains an appropriate system," the directors said.
"The importance of implementing structural reforms to improve the investment climate, diversify the economy and achieve sustainable growth," they said, calling on the authorities to "carry out a comprehensive reform of public finance management, including regular inventory replenishment, payment of arrears and improved spending commitment and cash management to prevent arrears New".
Managers also stressed "the importance of addressing weaknesses in management capacity and data availability. In addition, the implementation of the budget sharing agreement between the federal government and the Kurdistan Regional Government would put the two governments in a better position to address shocks."
It is anticipated that the next Article IV consultations with Iraq will be held in accordance with the decision of the Executive Board on the consultations with member countries associated with agreements with IFAD.
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