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The Iraqi Parliament during a session in Baghdad. Reuters
Economy News - Baghdad
A member of the Parliamentary Finance Committee, Jamal Cougar, suggested passing the second borrowing law, which includes borrowing 41 trillion dinars from local and international financial institutions.
Jamal Cougar said that the law on financing the fiscal deficit in the 2020 budget will be passed in the House of Representatives, but after amendments to the law.
He added that the salaries of employees will not face any deductions. Rather, deductions will affect the special and higher ranks and MPs.
The government of Mustafa Al-Kazemi may raise the internal debt to more than 111 trillion dinars if Parliament approves the second borrowing bill, which includes borrowing 41 trillion dinars to cover the fiscal deficit for the coming months .
Iraq needs from last September to December, an amount of 57.8 trillion dinars, and the estimated financial deficit during this period is 41 trillion dinars, and the government wants to finance it through the second borrowing law .
The government of Mustafa Al-Kazemi, the first government in the history of Iraq, to introduce two borrowing laws in one year, and its refusal to legislate the budget law for 2020 .
If the second borrowing law is approved, the level of internal debt will reach a historic stage, which is 111 trillion dinars, except for the external debt, which reaches 72 trillion dinars, and thus will exceed 70% of GDP .
Until last August, the internal debt was 52 trillion dinars, but over the past few days, the sovereign guarantees that were granted to private investors, who borrowed from various financial sources, were 14 trillion dinars, in addition to 10 trillion dinars borrowed during the past two months. To pay employees' salaries .
Continuing the borrowing policy will lead to an increase in inflation in the local market, and a rise in the prices of goods, which will affect the poor, whose proportion exceeds 30% of the Iraqi population .
The government is facing a large deficit in salaries, as it resorted to borrowing for fear of the downfall of the current political system, which most of the Iraqi people are angry with, and it did not resort to other options, for example reducing public spending, especially in the three presidencies, in which the door to employment is still open .
This amounts to the central government’s debts, excluding the Kurdistan Regional Government’s debts, which exceed $ 27 billion, to international oil companies .
The head of the Parliamentary Finance Committee, Haitham al-Jubouri, said that continuing with the borrowing policy will lead to the collapse of the currency and thus the collapse of the economy, calling on the government to search for other solutions that are more beneficial to the economy .
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