Government spokesman: We have adopted the principle of productive borrowing and integration into the international economic cycle, 9 APRIL

  Government spokesman: We have adopted the principle of productive borrowing and integration into the international economic cycle

Government spokesman, Bassem Al-Awadi, said on Monday, April 8, 2024, that the government has followed the principle of productive borrowing and integration into the international economic cycle.

Al-Awadi issued a statement, seen by Ultra Iraq, which came as “an emphasis from the government on transparency in economic work, and informing public opinion and the national and international media of Iraqi economic performance.”

He added: “In light of the Council of Ministers’ approval of the recommendations of the Diwani Order Committee 23942, related to regulating external borrowing and structuring Iraqi public external debt, the government took a series of executive measures and adopted a package of financial decisions, which ended in reducing external public debt by more than 50%. The debt will decrease from $19.729 billion in late 2022, to $15.976 billion in 2023, reaching approximately $8.9 billion in the current year.”

Mazhar Muhammad Salih, the Sudanese advisor, spoke about “Iraq’s regularity in paying its external debts due annually, of which only approximately 20 billion dollars remain.”

Al-Awadi said, “These financial steps, (which included halting a number of borrowing operations due to their delay and unproductivity, organizing and managing debts and auditing them, and restructuring some debts and directing them to create strategic projects), aim to prevent the Iraqi economy from mortgaging obligations that may affect, in the future, the political decision.” Or in the path of national development, which coincides with an urban renaissance and infrastructure reconstruction, which opens the way to a promising future and a revitalized economy, in which our current and future generations perform best and obtain the greatest opportunities.

In its latest report , the International Monetary Fund  warned  of the doubling of debt in Iraq, through an increase in the deficit, as it expected “the public finance deficit to reach 7.6% in 2024 and to expand further after that with the expected gradual decline in oil prices in the medium term.” Leading to “a near doubling of public debt from 44% in 2023 to 86% by 2029.”

Al-Awadi pointed out that his government “organized the process of financing cooperation with the international community in specific contexts, including direct productive borrowing, providing sovereign guarantees to ensure the production of projects undertaken by the private sector for the benefit of the government, and sovereign guarantees provided by the government for the benefit of institutions that finance the Iraqi private sector importing production lines from In order to build factories inside Iraq.

He explained, "These steps pave the way for our country's further integration into the international economic cycle, and for the government to adopt the principle of productive borrowing only, which effectively leads to an increase in domestic product, and the financing of national service and productive projects with economic returns, in a way that ensures their completion and is not delayed."

He concluded by saying: “With these firm steps, the government renews its determination to continue making a qualitative shift in the Iraqi economy, in parallel with tangible development in the services, infrastructure and social care sectors, which are all the pillars required to meet the aspirations of our people throughout Iraq, and implement the government program with its priorities.” And its targets.

Iraq's external debt in 2021 amounted to about $13 billion, and it arose while financing the war on ISIS after 2015, as the government advisor stated 3 years ago.  link