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"Fitch" is an American classification and reveals its forecasts on debt and currency reserve

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"Fitch" is an American classification and reveals its forecasts on debt and currency reserve

3,549 Economy 2021/03/24 12:42 Ta
Baghdad today - Baghdad


The American Credit Classification Agency amended, in its report, the future outlook for Iraq to stable, confirmed by "B-".

The amendment of the future view of Iraq reflects a lower decrease of foreign reserves.

The rating of Iraq is restricted to commodities and weak governance, the high level of political risk and an inactive banking sector, according to Reuters.

Fitch expects to descend the proportion of debt to GDP in Iraq at 2021 to 74%, before gradual rise in 80% in the medium term.

The agency pointed out that political risks internally and externally affect the rating of Iraq.

Foreign reserves are expected to be stabilized in 2021 with oil price and low load deficit. After landing last year


In April, the Agency announced in Nissan, installing the credit rating of Iraq at "B-" with a future outlook modified to negative.

Fitch for credit rating, said in a report, political risks remained a fundamental constraints on Iraq's classification, along with economic implications for the outbreak of Corona virus.

Iraq has received the lowest among all IAEA countries in the Composite World Bank Management Index, reflecting corruption and the lack of effectiveness of the government, as well as insecurity and political instability.

The Agency expected external financial deterioration for Iraq sharply, with the current account deficit to 16 percent and 6 percent of GDP, in 2020 and 2021.

According to the report, expectations refers to the decline in international precautions (including gold) to $25 billion by the end of 2021, a decline of more than $40 billion over two years.

"Iraq is affected by the risks associated with ongoing tensions between the United States and Iran, and large-scale protests, and has shown greater political groups, to undermine the effectiveness of the government over the past year," he said.

He pointed out that the classification reaffirming due to the current high level of international precautions of Iraq, the lower debt service and international financial support.

Iraq's precautions reached 66.7 billion dollars at the end of 2019 (8 months of current external payments) and declined to 62.9 billion dollars at the end of February, with more acute declines starting on March onwards.

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