Moody's: Iraq will witness a significant decline in financial revenues
Economy News _ Baghdad
A report issued by the credit rating agency Moody's stated that a number of countries in emerging markets and below, such as Iraq, Kuwait, Ecuador and Cambodia, which depend to varying degrees on goods or tourism, are likely to witness large annual decreases in financial revenues.
In its report, the agency stated that the sharp recovery in global financial markets, following a period of unprecedented turmoil, preceded the stability of production or low rates of infection with the Coronavirus in many emerging and frontier market economies.
He indicated that while a set of political responses supported the return of risk appetite, and what appears to have been successful in avoiding a complete global financial crisis, many economies will start their recovery with greater financial and external weaknesses.
According to the report, the unprecedented economic shock hit the low-rated governments more strongly, which led to widening financial and external imbalances, at a time when emerging and sub-emerging markets witnessed an economic shock through multiple channels that included lower export values, as a result of lower commodity prices, Weak tourism and reduced global demand, in addition to fluctuations in non-resident capital flows, indicating that the macroeconomic pressures added to other tensions at the financial and external levels.
In severe cases, liquidity pressures increased towards serious stress or a deficit, at a time when the agency clarified that some governments in emerging and sub-emerging markets have benefited from emergency financing, as the large financial support by international financial institutions and the formal sector has enabled financing of financial and external gaps. partially.
The agency indicated that governments with a low sovereign rating, which overcome the crisis without defaulting in payment, will continue to face major challenges during the recovery phase, with global capital flows remaining volatile, likely to impede investment, thereby limiting job creation and consumption. .
The agency stated that the unequal economic recovery and weak financial and external conditions will create permanent credit challenges for many countries, even after the return of global economic conditions to normal.
Number of observations 148 date of addendum 09/15/2020