Expectations of the Iraqi economy to shrink and the budget deficit to exceed 29%

by **claud39** Sat May 09, 2020 1:34 pm

Expectations of the Iraqi economy to shrink and the budget deficit to exceed 29%

09/05/2020

Economy News _ Baghdad

On Saturday, the World Bank expected the Iraqi economy to shrink and the budget deficit to rise to 29%.

According to the report, it is expected that "the country's GDP growth rate will shrink in the year 2020 by 9.7%, registering a decrease from a positive growth rate achieved in 2019 of 4.4%, which makes it the country's worst annual economic performance since 2003."

The report pointed out that "with Iraq’s past conditions and its entry into this current crisis, it has limited its ability to address the socioeconomic impact and mitigate it resulting from the drop in oil prices, reduce the production share and the turmoil caused by the embargo measures related to the Coruna virus."

And his report stated that "the public sector economy of the country that is totally dependent on oil has hindered the creation of job opportunities in the private sector. Moreover, the growing resentment about the lack of services and the increase in corruption and lack of job opportunities are all still present, in addition to the political stalemate over Forming a new government. "

"Financial regulation and diversification of the economy through a broader contribution to the private sector are vital to reducing Iraq's vulnerability to external shocks," said Sarju Kumar Juha, regional director of the World Bank for the Mashreq region.

He adds, "The presence of targeted reform and a program to promote growth would help maintain the reconstruction efforts and maintain the positive developments achieved in the electricity and agricultural sectors over the past year," noting that "

The report indicated that "if oil prices stabilize below $ 30 a barrel, and no reform measures are taken, the budget deficit will exceed 29% of GDP for 2020, and that the total financing needs will reach $ 67 billion (more than 39% of GDP) Total)".

The World Bank stated that, "According to this situation, the financing options will be limited, and the heavy dependence on local financing can affect the liquidity available for private sector credit, and weaken the budget of the Central Bank of Iraq, thereby creating pressures on financial inflation and the rate of selling the currency", / Guest: "At the same time, the possibility of access to global markets may prove difficult, taking into account the conditions of the global market and the weakness of the Iraqi economy system."

The report included "highlighting the importance of the digital transformation for Iraq and the urgent need behind it," noting that "the benefits resulting from the active digital economy are very huge, and upgrading the digital economy will help Iraq to improve economic opportunities, especially for young people, and thus meet the demands of citizens."

He pointed out that "the digital transformation of the Iraqi economy will require economic reforms and long-term development priorities, as well as a digital economic framework with several axes that include providing access to a high-speed Internet, providing digital management services, improving access to information, and developing the skills of young people in technology science."

http://economy-news.net/content.php?id=20187