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Dr.. Hasan Latif Kazim *: The Iraqi Economy in the Time of Corna Virus DinarDailyUpdates?bg=330099&fg=FFFFFF&anim=1

Dr.. Hasan Latif Kazim *: The Iraqi Economy in the Time of Corna Virus

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Dr.. Hasan Latif Kazim *: The Iraqi Economy in the Time of Corna Virus Empty Dr.. Hasan Latif Kazim *: The Iraqi Economy in the Time of Corna Virus

Post by claud39 on Tue Mar 17, 2020 12:57 pm

Dr.. Hasan Latif Kazim *: The Iraqi Economy in the Time of Corna Virus


03/16/2020



Dr.. Hasan Latif Kazim *: The Iraqi Economy in the Time of Corna Virus Hassan-Latif-image-1






The Iraqi economy has been reeling since 2014 on the impact of the economic recession, without the government being able to deal with its situation, and adopting fiscal and monetary policies that allow it to get out of its crisis. To be a lesson from the double crisis in the summer of 2014 (ISIS and the drop in oil prices), so no precautionary measures were taken for a similar crisis to occur, and it confirmed the path of managing the national economy that printed the behavior of the government since 2005.


Corona hits the global economy
This year, the Corona virus crisis emerged this year It hit China first, and spread heartbreakingly J 105 countries, developed and developing people to infect 109 578, and kills 3809 people (), and across the continents of the world, in the fast globalization of the disease may not only globalization of the world dread of it paralleled.


Soon, the results of the disease appeared in the global economy, as indicators of financial markets declined throughout the world, and the losses were the largest in the Gulf stock exchanges, and the largest losers were in Saudi Arabia, as Aramco lost a tenth of its share value in trading this week. Stock prices fell on the Tokyo Stock Exchange by 5% and Sydney by more than 7%, and the New York Stock Exchange suffered its heaviest loss since the 2008 crisis, as the Dow Jones Industrial and Standard & Poor's indexes lost nearly 8% of their value, and the Nasdaq lost 7% Of its value, billions of dollars were lost from the value of the companies included therein.


As for oil, which was the locomotive that made these losses, its prices fell by 25%, following Saudi Arabia's decision to cut prices significantly after OPEC failed to reach an agreement to cut production with Russia, the second largest oil producer outside OPEC. Which warns of a new price war between Saudi Arabia and Russia.


Iraq and Corona
Corona soon entered Iraq via Iran, and on February 24, the first case of the new Coronavirus in the holy city of Najaf was diagnosed by an Iranian student in the Hawza. However, the economic effects and repercussions also came from outside the borders, because an economy comes from 95% of its governmental resources from abroad, and the shock started to be formed due to the sharp decline in the prices of crude oil, which is the mainstay of its exports.


And just as the Corona does with a person when it targets the person’s lung, Corona has targeted the oil sector. Basra’s heavy crude lost 53% of its price, which reached on March 9, $ 26.92 a barrel, after reaching its highest level on February 20 of this year to The price of $ 57.60 a barrel. As for Basra Light, it lost 46% of its price, which reached on March 9, $ 32.68 a barrel, after reaching its highest level on February 20 of this year, to the price of $ 61.05 a barrel. This indicates the lightning of a general financial crisis and the deepening of the recession in the Iraqi economy.


Federal budget conditions: a hypothetical scenario
in order to identify the conditions of the federal budget in light of oil price changes, and because there is no federal budget for this year after the government’s resignation, we will set a set of assumptions upon which we will build the federal budget scenario for 2020, namely:


• Using the same daily export rate in the 2019 budget, which is 3.880 million barrels per day, which means that the total exports will be the same in the current year.


Achieving non-oil revenues equal to what was estimated in 2019, amounting to 11061196000000 dinars.


• The exchange rate is the same as 1182 dinars.


• Total expenses in 2020 equal to last year, which is 133.107.616.411.200 dinars.


• There is no increase in the state's staffing.


First: The current price ($ 30 a barrel): The conditions of the federal budget, according to the assumption of the current price, will mean that the deficit will reach 54% of total spending, or about 71.7 trillion dinars, because the total revenue generated will be 61.4 trillion dinars, of which 50.3 trillion dinars are oil revenues.


Second: The low price ($ 25 a barrel): The drop in crude oil prices to the level of twenty-five dollars a barrel will mean a greater aggravation of public financial conditions, as the deficit rises to 60%, or about 80.0 trillion dinars, at a time when oil revenues equivalent to 42.0 trillion dinars will be achieved .


Third: The very high price (deficit = zero): Although this scenario is not realistic compared to the previous two scenarios, it starts with a question about the price that will make the deficit disappear completely, and using the same previous assumptions, the price is 72.7 dollars per barrel.


Fourth: The scenario of last year (price 56 dollars per barrel): that every dollar added to the price of one barrel will mean an increase in oil revenues by 1.4 billion dollars, so if the price rise to 40 dollars, it can reduce the deficit to 21.1%, or about 28.0 Trillion dinars.


Government and the economy
The stagnation of the local economy and the decline in oil revenues will lead to a negative impact on government revenues from the tax, and we can expect the deficit to worsen in all low-price scenarios. About the price expectations assumed by the government.


There is no doubt that the first policy that the government will consider is more austerity and a reduction in “unnecessary” spending, which, according to its previous experience, will be social spending, especially in relation to education, education and social protection, which will put more pressure on diamonds, and exacerbate conditions Poverty and deprivation, and the need for more spending on health in light of the potential for an outbreak of the Corona pandemic, and the need to enhance food security, and more negative consequences occur for the economy under pressure from recession, at a time when the effects of the limited multiples will also be lost, with increasing rates of dependence And increased cash preference in light of the next crisis.


(*) Professor of Economics at the University of Kufa

Click on the following link to download the PDF file




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Dr.. Hasan Latif Kazim *: The Iraqi Economy in the Time of Corna Virus Empty Macroeconomic policy papers

Post by claud39 on Tue Mar 17, 2020 1:07 pm

Macroeconomic policy papers



March 17, 2020


Dr.. Hasan Latif Kazim *: The Iraqi Economy in the Time of Corna Virus Hassan-Latif-image-1




Dr.. Hasan Latif Kazim *: The Iraqi Economy in the Time of Our Corna
virus

The Iraqi economy has been reeling since 2014 on the impact of the economic recession, without
The government can deal with its situation, and adopt fiscal and monetary policies that allow it to exit
Its crisis, and even that its views deepened the causes of the recession and mortgaged it almost completely for the movement of tunnels.

Year, and did not respond to what could be a lesson from the double crisis in the summer of 2014 (ISIS)
And the low oil prices (), no measures were taken, as a result of a similar crisis, and confirmed the path of management
The national economy that has characterized government behavior since 2005.

Corona hits the global economy
The crisis of the Corona Virus that struck China first and spread in a way has emerged this year
Heartbreaking in 105 countries, developed and developing, affecting 109578 people, killing 3809


1) Persons
And, across the continents of the world, in a rapid globalization of this disease may be matched only by the globalization of fear
Universal of it.

Soon, the results of the disease appeared in the global economy, as financial market indicators declined
Across the world, the losses were the largest on the Gulf stock exchanges, and the largest oil companies were the losers
In Saudi Arabia, Aramco lost a tenth of its share value in trading this week. Prices are fixed
Shares in the Tokyo Stock Exchange increased by 5%, and Sydney, by more than 7%, incurred Wall Street
New York has suffered its heaviest loss since the 2008 crisis, as it lost the Dow Jones industrial average and Standard
And Poor's nearly 8% of their value, and the Nasdaq lost 7% of its value, and billions lost
Dollars from the value of the companies included in it.

As for the oil, which was the locomotive that made these losses, its prices fell
By 25%, following Saudi Arabia's decision to cut prices significantly after OPEC failed to
Reach an agreement to cut production with Russia, the second largest oil producer outside OPEC. Which
Warns of a new price war between Saudi Arabia and Russia.

Iraq and Corona
Corona soon entered Iraq via Iran, and on February 24 it was first diagnosed
Infection with new Corona virus in Najaf, an Iranian student in the Hawza. But now
Economic impacts and repercussions are also from outside the borders, the economy comes from 95% of the total

1
https://www.kff.org/global-health-policy/fact-sheet/coronavirus-tracker/

His government resources are from abroad, and the shock started to be shaped by the sharp drop in oil prices
Crude, which is the mainstay of its exports.

And just as a corona does to a person when it targets the lung of the injured, Corona has targeted a cut
Oil, Basra Heavy Heavy lost 53% of its price, which on March 9, amounted to $ 92.26
Per barrel, after hitting a high on February 20 this year, at 60.57
Dollars a barrel. As for Basra Light, it lost 46% of its price, which reached 9 March.

$ 68.32 a barrel, after hitting its highest level on February 20 of this year
The price is $ 05.61 per barrel. This indicates the glare of a general financial crisis and the deepening of the recession in the economy
Iraqi 2
.

Federal budget statuses: a hypothetical scenario
In order to get acquainted with the federal budget conditions in light of the oil price changes, and because of
Lack of a federal budget for this year After the government resigned, we will set a set of assumptions
On which we will build the federal budget scenario for 2020:

نفسه Use the same daily export rate in the 2019 budget, which is 880.3 million barrels
Every day, this means that the total of exports will be the same this year.
 Achieve non-oil revenue equal to that estimated in 2019
11061196000000 dinars.
الصرف The exchange rate is the same as 1182 dinars.

2
https://oilprice.com/freewidgets/get_oilprices_chart/4187


النفقات Total expenditures in 2020 equal to that of last year
Dinar 133.107.616.411.200
 No increase in the functional owner of the country.

First: The current price ($ 30 a barrel): The conditions of the federal budget are based on an assumption
The current price will mean that the deficit will reach 54% of total spending, or about 7.71 trillion
Dinars, because the total revenue generated will reach 4.61 trillion dinars, of which 3.50 trillion dinars
Revenue income.

Second: The low price ($ 25 a barrel): The drop in crude oil prices to the level of five
And twenty dollars per barrel will mean a greater aggravation of the fiscal situation, as the deficit rises to 60%
Or about 0.80 trillion dinars, at a time will be realized any revenues account equivalent to 0.42 trillion dinars.

Third: the very high price (deficit = zero): although this scenario is not realistic
In the previous two scenarios, he turns from asking what price will make the deficit disappear completely.
Using the same previous assumptions, the price is $ 7.72 per barrel.

Fourth: Last year's scenario (price is $ 56 a barrel): Every dollar is added to a price
A barrel would mean an increase in oil revenue of $ 4.1 billion, so the price increase
To $ 40, the deficit could be reduced to 1.21%, or about 0.28 trillion dinars.

Government and the economy

The stagnation of the local economy, and the decline in oil revenues, will negatively affect returns
The government is tax-free, and we can expect the deficit to worsen in all price scenarios
Low. About the price expectations assumed by the government.


There is no doubt that the first policy that the government will consider is more austerity,
And reduce “unnecessary” spending, which, according to her previous experience, will be social spending,
Especially with regard to education, and social protection, which will put more pressure on
Diamonds, exacerbate poverty and deprivation, and the need for more spending on health under
The potential for a Corona pandemic, and the need to enhance food security, and more results happen
The downside is for an economy under recession, while the multiplier effects will be lost
Limited is also the case, with the interaction of hoarding rates increasing, and the monetary preference increasing in light of the crisis
Coming.


(*) Professor of Economics at the University of Kufa
Copyright © Iraqi Economist Network. Republishing is permitted provided that
Source. March 17, 2020
http://iraqieconomists.net/ar/



http://iraqieconomists.net/ar/wp-content/uploads/sites/2/2020/03/%D8%A7%D9%84%D8%A7%D9%82%D8%AA%D8%B5%D8%A7%D8%AF-%D8%A7%D9%84%D8%B9%D8%B1%D8%A7%D9%82%D9%8A-%D9%81%D9%8A-%D8%B2%D9%85%D9%86-%D9%83%D9%88%D8%B1%D9%88%D9%86%D8%A7-%D9%81%D8%A7%D9%8A%D8%B1%D9%88%D8%B3.pdf


http://iraqieconomists.net/ar/2020/03/16/%d8%af-%d8%ad%d8%b3%d9%86-%d9%84%d8%b7%d9%8a%d9%81-%d9%83%d8%a7%d8%b8%d9%85-%d8%a7%d9%84%d8%a7%d9%82%d8%aa%d8%b5%d8%a7%d8%af-%d8%a7%d9%84%d8%b9%d8%b1%d8%a7%d9%82%d9%8a-%d9%81%d9%8a-%d8%b2%d9%85/
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