Latest topics
ED. OP -Iraq's ECONOMY is in TROUBLE -Iraq's economy, beaten by Islamic State war and low oil prices, struggles
Dinar Daily :: DINAR/IRAQ -- NEWS -- GURUS and DISCUSSIONS :: IRAQ and DINAR -- ARTICLE BASED INFORMATION and DISCUSSIONS
Page 1 of 1
ED. OP -Iraq's ECONOMY is in TROUBLE -Iraq's economy, beaten by Islamic State war and low oil prices, struggles
Iraq's economy, beaten by Islamic State war and low oil prices, struggles amid rising protests
The Associated PressIn this Saturday, Aug. 8, 2015, photo an Iraqi street currency exchanger counts banknotes in Baghdad, Iraq. Iraq is battling both the Islamic State group and massive budget deficits brought on by the lowest global oil prices in six and a half years, forcing it to cut spending on government projects local businesses have relied on for years. (AP Photo/Karim Kadim)
Associated Press Aug. 18, 2015 | 11:18 a.m. EDT + More
By SINAN SALAHEDDIN, Associated Press
BAGHDAD (AP) — In business since the 1960s, Karim al-Aboudi's family has seen Iraq's economy boom with oil wealth and bust through wars and the 2003 U.S.-led invasion, but today marks the worst downturn he's seen in decades.
Forced to fire 65 percent of his staff and close two of his six aluminum and glass factories, al-Aboudi's troubles mirror those facing business owners across Iraq. As the country battles the Islamic State group on the ground, it faces massive budget deficits brought on by the lowest global oil prices in six and a half years.
And while austerity cuts have helped Iraq fund its military effort against the extremists, it has slowed businesses like al-Aboudi's and construction firms that rely on government contracts.
Taking a deep puff of a cigarette, 65-year-old al-Aboudi said he and others don't see it getting much better soon: "The manufacturers and merchants are now only drinking tea and reading newspapers."
Since early 2014, Iraq has suffered a serious economic decline after the Shiite-led government in Baghdad started losing territory to the Sunni militants of the Islamic State group. Low oil prices exacerbated the decline, wreaking havoc on Iraq's national budget, of which oil revenue makes nearly 95 percent.
As of July, Iraq's oil revenues stood at $31.5 billion, according to Oil Ministry figures, with an average daily export capacity less than a 3.3 million barrel quota set in this year's budget. Iraq's semi-autonomous Kurdish region now sells oil independently from the central government.
Iraq's $102.5 billion budget now runs a deficit of about $21.4 billion. Some $27 billion is earmarked for defense, but more could be needed.
"For sure the situation in dire and needs quick alternatives," lawmaker Haitham al-Jaburi said.
Iraq had a state-run economy under dictator Saddam Hussein, buoyed by its oil wealth. Back then, 1 Iraqi dinar was worth $3. But the economy began to suffer under economic sanctions after the 1991 Gulf War. By the time of the U.S.-led invasion, it was 3,000 dinars to $1. Today, it's about 1,166 dinars to $1. Annual inflation stands at about 2 percent.
Like other businesses, al-Aboudi's flourished after Saddam's overthrow, buoyed by authorities suspending most tariffs and import duties and starting nationwide government-funded projects. But sectarian violence in 2006 and 2007 damaged the country's economy. Meanwhile, Iraq's national power grid supplies only a fraction of the country's needs, forcing residents and business to rely on diesel generators.
Reeling from the Islamic State advance, Iraq's government now has stopped spending money on construction projects to fund its military.
"Since the deterioration in security situation, the fall of Mosul and the austerity measures, the (government) business has dropped to zero," said al-Aboudi, whose business was 65 percent government-funded projects.
Reacting the crisis, Iraq plans to issues bonds worth $7 billion — $5 billion in international bonds and $2 billion for domestic banks — to narrow the deficit. It introduced initiatives to impose new excise and consumption taxes. It also secured a $1.7 billion in loans from the World Bank and a $833 million loan with the International Monetary Fund.
Iraq also revived a long-delayed plan to redenominate the Iraqi dinar by knocking three zeroes off the nominal value of its banknotes, said Ihsan Shamran al-Yassiri, the head of Iraq Central Bank Issuing and Vaults Department. The plan is set to be implemented by 2017 after restructuring dinar by issuing two large banknotes — a 50,000 dinar note before the end of this year and 100,000 banknote next year — and canceling small ones.
This month, bond rating agency Fitch gave Iraq its first rating, calling it "B-" with a stable outlook. The rating agency forecast a double-digit fiscal deficit for 2015 due to lower oil prices, higher military spending and war costs.
http://www.usnews.com/news/business/articles/2015/08/18/iraqs-economy-battered-by-islamic-state-war-low-oil-prices
Ssmith- GURU HUNTER
- Posts : 20495
Join date : 2012-04-10
Dinar Daily :: DINAR/IRAQ -- NEWS -- GURUS and DISCUSSIONS :: IRAQ and DINAR -- ARTICLE BASED INFORMATION and DISCUSSIONS
Page 1 of 1
Permissions in this forum:
You cannot reply to topics in this forum
Fri May 10, 2024 5:03 pm by kenlej
» Go Russia
Sun May 05, 2024 11:37 am by kenlej
» Go Russia
Sun May 05, 2024 10:51 am by kenlej
» Textbook Tony
Mon Apr 29, 2024 4:13 pm by Mission1st
» The Rockefellers and the controllers are freaking out right about now
Fri Apr 26, 2024 11:16 am by kenlej
» Phony Tony sez: Full Steam Ahead!
Sat Apr 13, 2024 11:51 am by Mission1st
» Dave Schmidt - Zim Notes for Purchase (NOT PHYSICAL NOTES)
Sat Apr 13, 2024 11:45 am by Mission1st
» Russia aren't taking any prisoners
Fri Apr 05, 2024 6:48 pm by kenlej
» Deadly stampede could affect Iraq’s World Cup hopes 1/19/23
Wed Mar 27, 2024 6:02 am by Ditartyn
» ZIGPLACE
Wed Mar 20, 2024 6:29 am by Zig
» CBD Vape Cartridges
Thu Mar 07, 2024 2:10 pm by Arendac
» Classic Tony is back
Tue Mar 05, 2024 2:53 pm by Mission1st
» THE MUSINGS OF A MADMAN
Mon Mar 04, 2024 11:40 am by Arendac
» Minister of Transport: We do not have authority over any airport in Iraq
Mon Mar 04, 2024 11:40 am by Verina
» Did Okie Die?
Mon Mar 04, 2024 11:34 am by Arendac
» Hello all, I’m new
Wed Jan 31, 2024 8:46 pm by Jonny_5
» The Renfrows: Prophets for Profits, Happy Anniversary!
Wed Jan 31, 2024 6:46 pm by Mission1st
» What Happens when Cancer is treated with Cannabis? VIDEO
Wed Jan 31, 2024 8:58 am by MadisonParrish
» An Awesome talk between Tucker and Russell Brand
Wed Jan 31, 2024 12:16 am by kenlej
» Trafficking in children
Mon Jan 29, 2024 7:43 pm by kenlej