Inflation In Iraq Has Declined And Its Gold Reserves Have Increased. Expert Explains
Time: 2025/07/07 21:23:08 Read: 825 times {economic: Al-Furat News} Iraq recorded a noticeable decline in the inflation rate in conjunction with the rise in its gold reserves during the first quarter of 2025, in financial and monetary indicators described as positive despite the challenges posed by oil price fluctuations.
Financial expert Salah Nouri explained in a statement to {Al-Furat News} that:
"The decline in the inflation rate is due to a group of factors, most notably the policy of the Central Bank of Iraq in controlling the supply of cash for circulation, in addition to regulating borrowing to finance the private sector at limited rates that contribute to revitalizing the economy without causing a cash surplus".
He added, "The decline in global commodity prices had a direct impact, given Iraq's heavy reliance on imports to meet its needs for goods and merchandise, which was reflected in a reduction in local price levels."
As for the increase in gold reserves, the expert attributed it to the Central Bank's policy of diversifying investment instruments by balancing debt securities in dollars with the purchase of gold, which is a safe store of value.
According to him He stressed that "these policies aim to support and enhance the Central Bank's reserves within its monetary policy orientations."
In the same context, Nouri warned of
"the negative effects of the decline in the prices of exported oil,
which came as a result of OPEC Plus' decisions to increase production,
which may reflect negatively on the state's general revenues and
thus on the implementation of the operational and investment budget items".
He pointed out that "the Federal Ministry of Finance has two options in light of this decline: either reduce spending to maintain the deficit rate specified in the budget, or continue spending and increase the deficit, which will force the government to resort to internal borrowing".
The expert said, "This challenge is directly related to fiscal policy, which requires a careful balance between spending and revenues."
According to an official report issued by the Central Bank of Iraq, the
Iraqi economy witnessed significant shifts in monetary indicators during the first quarter of 2025.
Inflation fell by 21%, while money transfers abroad fell by 0.6%, indicating a relative improvement in the monetary balance and liquidity control.
The report, which covered the months of January, February and March, also showed a significant increase in the value of Iraq's gold reserves, rising from 17.8 trillion dinars to 21.2 trillion dinars, reflecting the Central Bank's reliance on a policy of diversifying assets and enhancing safe havens to protect cash reserves in light of global market fluctuations.
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