Wednesday, November 6, 2024

Strong national economy and sober banks, 7 NOV

 Strong national economy and sober banks

In an important presentation before the Miri Conference on Economic, Financial and Banking Reform, the Governor of the Central Bank, Mr. Ali Mohsen Al-Alak, explained the indicators of the recovery of our national economy and the major transformations in the structuring of government and private banks achieved in 2023 and 2024 and expected in 2025, which are standard indicators that are adopted in assessing the strength of the economy and the sobrity of the banking sector.

 One of the most prominent of these indicators is the adequacy of foreign cash reserves, the exported domestic currency, the rate of inflation and external debt, while stressing that the monetary policy objectives of the Central Bank contained in its law are to achieve growth and economic stability and economic stability and that one of its main objectives is to achieve stability in the financial system and the monetary system, reduce inflation rates and stabilize the prices of goods and services in Extremely complex economic, security and political conditions that Iraq suffered from in 2023 and 2024, and the world is going through, especially the countries of the current geographical region, which affects our country negatively and positively.

These conditions have been suffering from our economy for decades, and the reason is the reason is the rent of the economy and the dependence of 95% of the general budget revenues on oil, which constitute approximately 60% of the gross domestic product. The government is making clear efforts to reinform the effective economic sectors, namely agriculture, industry, tourism, customs and tax services fees, and the rise in their share in the general budget revenues to 20%. The low contribution of these sectors to the GDP led to the absence of local production that covers the consumer need of citizens for food and other basic materials, so the dependence was almost total on imports for the commercial private sector and from different origins, and successive governments were unable to control internal trade and trade regulation. Weak control over illegal trade and informal border ports have led to the impact of the monetary and commercial market.

Therefore, this indicator was the most prominent challenges faced by monetary policy and directly affected the stability of the exchange rate, which led the Central Bank to take many measures in cooperation with the government in regulating foreign trade, controlling control over foreign transfers, regularity in the global financial and banking system, complying with international standards and digital transformation in the banking sector, and working to prepare and launch its new strategy for reform and banking classification in all its basic circles at the level of internal and external banking transactions, the most prominent of which is securing the US dollar for large and registered traders and each trader, regardless of his classification at the official price through the electronic platform exclusively.

This was achieved through the analysis of indicators of the annual inflation rate of 3.8% after it was 4.4% and compared to the annual inflation rates of regional and neighboring countries. Most of these countries have reached very high inflation rates, reaching 80.4% in Turkey, Sudan 117.4%, Iran 40.0%, in the Maghreb countries with relative economic stability in Tunisia 9.3%, Algeria 9.0% and Morocco 5.0%, Egypt reached 37.4% and ranged in the Gulf countries with stable economies and oil rich between 2.4%.4%. This confirms, and there is no doubt that the Central Bank’s strategy and procedures during the years 2023 and 2024 achieved one of the main monetary policy objectives, which is to reduce the inflation rate and maintain the general level of the prices of goods and services, and is currently working to achieve the other goals, which are stabilizing the exchange rate and maintaining a foreign reserve that covers the local currency. In trading and imports, which exceeded 100 billion dollars and enough 140% to cover the local currency in circulation.

So the economic results and outputs confirm that the policies and procedures carried out by the Central Bank in cooperation with the government have achieved an important objective of monetary policy, to achieve stability in the monetary system, which is an important step in achieving other objectives of monetary policy.

We must point out that one of the most prominent indicators of our economy’s strength and recovery is what the International Monetary Fund finally predicted that the expected economic growth rate in 2025 will be 5.3%, while it contracted by 2.2% in 2022. The expected rate is higher than the growth rates in Morocco, Kuwait, Bahrain, Oman, Algeria, Jordan and Qatar. It is an indicator of the strength of our economy and is an inevitable result of the economic and financial reform programs applied by the government and the central bank since 2023.


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Added 2024/11/06 – 12:30 PM


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