2021/01/04 11:29 Readings 568 Section: File and Analysis
Mazhar Saleh: There is no binding program between Iraq and the IMF ... and the total deficit in 2021 is about 71 trillion dinars
Baghdad / Al-Masalla: The economic advisor to the Prime Minister, Mustafa Al-Kazemi, Mazhar Muhammad Salih, spoke on Monday, January 4, 2021 about the Iraqi public finances in the years 2020-2021, as the draft federal budget for 2021 indicates that the total deficit The plan will rise to nearly 71 trillion dinars, and the aforementioned deficit will account for no less than 42% of total spending, and no less than 28% of the current GDP.
Salih told Al-Masalla that the shrinking financial conditions in Iraq led to dangerous economic manifestations, as the contraction of demand or government spending in 2020 led to a widening of the national income gap, and a drop in growth by about 11% from its rates.
He added that the contraction was accompanied by an increase in unemployment levels that were not less than 25% of the Iraqi workforce, as well as an increase in poverty rates among the population, which exceeded 30% of the country's families.
The economic advisor to the Prime Minister revealed the fact that a request was submitted to Iraq to raise the price of the dollar to 1660 dinars per one US dollar.
Saleh said that there is no binding program currently between Iraq and the International Monetary Fund, but it is following the current account deficit of the balance of payments of member countries.
He added that the IMF is following the current account deficit, due to the global economic recession, and its stable effects on the economies of the member states, noting that the aforementioned is one of the routine actions that the Fund carries out in consulting with all countries.
The economic advisor identifies two reasons for the rise in the dollar’s exchange rate, stressing that they are temporary bubbles, affected by speculative rumors to reap profits.
The first reason is the proximity of the budget bill, and the conflicting information raised about correcting the exchange rate, which generated vague signals that the market adopted for speculation and hedging in the short period.
The second reason is the approaching date of the legislative elections, the political disputes, and the signals they generate, and information related to political gains, or the reasons for preparing for the elections.