Economists: The Central Bank's policy targets inflation and stimulates the development side
Investigations and Reports Today, 18:32
Baghdad - INA - Nassar Al-Hajj
Economic experts confirmed today, Thursday, that the Iraqi Central Bank pumping an amount of one trillion dinars to support the economy will make a leap in the field of construction and production and provide job opportunities for the unemployed.
The financial advisor to the Prime Minister, Mazhar Muhammad Salih, told the Iraqi News Agency (INA), that "the monetary policy of the Central Bank within the current trends is working towards the so-called theory of assets in the policies of central banks in the world, which is to support the liquidity of the economy and urge bank credit to finance real activities of the economy."
Pointing out that "the Iraqi economy has suffered from deflation and unemployment since the health crisis in 2020, which made monetary policy to compensate for the economy's policy and break bottlenecks; therefore,
deflation is an unstable phenomenon, as is the case with inflation."
He added, "Monetary policy in general is a short-term policy, and the Central Bank works according to a policy that targets inflation and finds an equation between inflation and growth in order to achieve the desired economic stability."
An expected leap in the field of construction and production, in turn, the economic expert, Basem Antoine, confirmed to the Iraqi News Agency (INA), that "the central bank pumped a trillion dinars to support the economy, which will not cause inflation, indicating that
"if it is spent in the right place, it will make a leap in the field of construction and production and will provide job opportunities. and housing for citizens.”
Proposals to support local projects
For his part, the economic expert, Abdul Rahman al-Mashhadani, confirmed to the Iraqi News Agency (INA) that "the initiatives of the Central Bank have continued since its launch in 2017, especially to activate the development aspect of financing small, medium and large projects by allocating 6 trillion dinars," noting that
"about 3 trillion have been added." Dinars for the housing sector with soft loans and project financing.
He added, "There is a role that the Ministry of Finance must play when the economic situation is in a downturn through spending on development projects," noting that "these effects will leave cumulative pressures."
He continued, "We saw an increase in the inflation rate, which reached 8% due to the increase in global prices, services and international transport compared to last year," noting that
"any step that calls for a monetary issuance that is pumped into the local market will have a new inflation return."
He pointed out that "the Iraqi markets need strong payments by establishing simple and local projects," noting that
"the increase in loan grants and the increase in the central bank's dollar sales led to an increase in demand for imported goods in the market."
And the Central Bank of Iraq announced earlier, increasing the allocations of its initiative to small and medium enterprises.
And the Governor of the Bank, Mustafa Ghaleb, stated in a statement received by the Iraqi News Agency (INA), that "the Central Bank increased the amount of its initiative to lend to small and medium-sized enterprises by an amount of one trillion dinars,
bringing the total amount allocated for this goal to two trillion dinars," noting that
"the Central Bank's lending initiatives, contributed to Supporting the sectors of industry, agriculture, housing and trade, and they now constitute nearly 30% of the total credit granted to the private sector, and have contributed an important percentage to the GDP.
He added, "There are some loans provided by the Central Bank that are granted without interest, but rather in return for an administrative commission only," noting that
"the one trillion dinars initiative contributed to creating thousands of job opportunities and financing nearly three thousand housing units throughout Iraq, and it has exceeded The percentage of its implementation reached 90%, which prompted us to increase its amount by an additional trillion dinars.
And he continued, fearing, according to the statement, that "the monetary policy tools contributed greatly to supporting the economy and overcoming the financial crises that occurred in the country."