Don961:  The World Bank expects Iraq’s economy to improve gradually

Friday, April 12, 2019

Baghdad / Al-Sabah – Zina Ibrahim

The World Bank Fund predicted that the economy will continue to weaken in the first half of 2019 and that growth in 2019 will slow by 0.7 percent of the global economy, while the Bank expects the Iraqi economy to gradually improve after the severe economic pressures of the last four years.

The global economic growth rate fell to 3.6 percent in 2018 and is expected to continue to decline to 3.3 percent in 2019.

The general economy has started a weak start and is expected to rise in the second half of the year as inflationary pressures ease as the outlook for trade tensions improves. Between the United States and China with the emergence of the prospects of the trade agreement and the efforts of major central banks to facilitate the economy.

At the domestic level, the bank expects the Iraqi economy to gradually improve after the severe economic pressures of the last four years. Real GDP growth is estimated at 0.6 percent in 2018, thanks to a marked improvement in security conditions and rising oil prices, reversing a 1.7 percent contraction in 2017. The non-oil economy saw rapid growth with a growth rate of 4 percent, Oil production slightly lower than in 2017 in line with the OPEC agreement.

Recently, the Iraqi economy has received a boost of confidence in the signing of several trade agreements with neighboring countries. Reconstruction efforts are proceeding at a moderate pace. Inflation remained low at 0.4 percent in 2018, but slightly higher than in 2017 due to rising domestic demand as well as rising food and transportation costs.

The economic outlook has improved due to higher oil prices and improved security, but restrictions on capital spending will hinder accelerated growth driven by recovery.

Growth is expected to rise to 8.1 percent in 2020, mainly due to higher oil production, with the OPEC agreement ending in mid-2019. Non-oil growth is expected to remain positive on the back of increased investment needed to rebuild the nation’s devastated infrastructure network and consumption Private investment.

However, the recently approved 2019 budget represents a significant increase in recurrent spending. Unless there is a major reorientation in the fiscal policy of the comprehensive recovery approach, there will be limited fiscal space to support post-war recovery and long-term development. Rising spending, coupled with falling oil prices, would raise the projected budget deficit by 5.4 percent of GDP in 2019 before cutting it to around 3 percent in 2020-2021. Lower oil prices and increased imports would translate the balance of current transactions into deficits, partially financed by international reserves.    link

Don961:  Financial Policy

Friday, April 12, 2019

Thamer Hymes

Behind the leap of the Chinese economy is their saying (it does not matter if the cat is white or black as long as it eats rats). There is no doubt that our economy is very weak on the development side because of the cross-link between consumption and development.

When we compare our economic and developmental process with the experiences of developing countries, the results are not encouraging, as long as we do not define the problems of the relationship between state capital and private capital.

This is the source of the accusation within the contradictory economic system between the same capital flows and the mechanisms of transferring the sources of wealth abroad. Or keep their surpluses in regional banks.

The pretext of stability and the maintenance of the standard of living by monetary policy will remain an insignificant priority in the movement of capital and the conflict between the capital of the state and the capital of the state and its rent forces.

Therefore, our monetary, financial and economic policy should be drawn up to reach our economic identity to be a clearly defined infrastructure.

This financial challenge has resulted in a lack of confidence in saving to become the third or fourth country to import gold for the hoarding; to join trillions of dinars outside official and banking trading, Against the dollar and after a short period of time, the gold holder pays the dinar to benefit from the currency pairs as a legitimate hedge against the traditional interest.

This is a process of recycling that is not productive, but only a confrontation of expenses due, although the guarantee of gold free of any risk, and thus expand these directions of non-productive and unnecessary to become a sale installment payments and excessive to buy the dollar and repay it in installments convenient until the Umrah Upsets

The power of the consumer trend always comes at the expense of production as the cost of production increases against the random importer or programmed dumping and other economic complications that have negatively affected our government and private factories and most of the manufacturing industry, as well as the agricultural and animal product

Thus, non-developmental loans are a patchwork and not a solution to the extent that they reinforce the current approach, which is determined by the currency market, which promotes consumerism on a daily basis, in order to reproduce the market economy and its necessities, which is not innocent after consuming consumption in all its manifestations. Money laundering and corruption of receivables.

We hope that the decision-makers and those responsible for the economic file will thoroughly review the financial and monetary deviations that took place in the previous years, and go beyond the mismanagement of our economic resources.     link

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