The World Bank expects a "significant" deficit in Iraq’s budget for the current year
1 hour ago
Digital Media NRT
The regional administration of the Mashreq Department at the World Bank stressed on Monday that controlling public financial conditions and economic diversification through increased private sector participation are two issues of paramount importance to reduce Iraq's vulnerability to external shocks.
The regional director of the department, Saroj Kumar Jha, said in comments followed by "Digital Media NRT" today, (4 May 2020), "The adoption of a program directed towards reform and promoting growth will contribute to the sustainability of the reconstruction efforts and maintain the positive improvements that It was achieved in the electricity and agricultural sectors during the past year, saying that "such a program is essential to create the jobs that young people need and help restore the confidence of Iraqi citizens."."
"The unsustainable stimulus package that has been put in place since last October - including increasing public sector employment, lowering the retirement age and various financial transfers - along with weak oil revenues, is expected to have harmful financial implications," Jha said.
He explained, "If the oil prices stabilize within the low thirty dollars and do not take any reform measures, the World Bank estimates that the budget deficit will exceed 29% of the gross domestic product in 2020, and the total financing needs will reach 67 billion US dollars.".
Jha pointed out that it is necessary for Iraq to start a comprehensive economic reform agenda that looks towards the future in order to enable the private sector towards driving growth and creating diversity and job opportunities.