Iraq maintains its credit rating with a stable outlook
A recent report by Standard & Poor’s Credit Rating Agency (S&P) states that Iraq’s credit rating has been maintained at B- / B, with a stable outlook, highlighting its financial and economic stability.
The Iraqi Ministry of Finance approved a report and the results were distributed in a statement. The report stated that the new classification was a reflection of the Ministry’s continuous economic and financial reforms, as well as its efforts to maintain foreign currency reserves that exceed the external public debt. The statement also mentioned that the Ministry has been fulfilling its external financial obligations due to the stability of crude oil prices.
The statement explains that the report used several indicators to classify the situation. The most important of these indicators were the Iraqi parliament’s approval of the tripartite budget for the years 2023, 2024, and 2025. This budget aims to revive infrastructure projects and economic needs. Additionally, the formation of the government by the end of 2022 has led to a state of political stability.
The report stated that there is a prediction of a significant surplus in Iraq’s current account, which is in line with economic expectations. This surplus will further strengthen Iraq’s foreign currency reserves, which will enhance its ability to service its debt in the next 12 months.
The agency is predicting an annual economic growth rate of 2.6% for the years 2023-2026. This growth is expected to be driven by an increase in oil production and its positive impact on non-oil industries. Furthermore, it is expected that the annual inflation rate will decrease to 4% in July 2023, down from 5-6% during the years 2021 and 2022. This reduction can be attributed to the government’s measures to revalue the currency, control prices, and support food and energy prices.
The agency’s report suggested that Iraq’s credit rating could improve if the country experiences high economic growth, diversifies its public financial revenues from both oil and non-oil sources, increases the per capita share of national income, and consistently implements financial and economic policy reforms.
No, there is no RV as of yet. I can certainly tell you the CBI knows nothing about any recent plan to RV or conduct the project to delete the zeros. I know it’s not what we want to here at this point, but it is reality…sorry. Also remember that Obama’s plan for the redevelopment of Iraq, in part is very unfair to the Iraqi people, as they suffer with inflation due the dollar crisis and low Iraqi dinar rate. The Obama plan is a subjective one meaning who sets the criteria and what are the target dates? Obama is not out of office and so who is still following his outdated plan for Iraq? Why did Dr Shabibi want to reinstate the dinar way back on 2012-2013 and was abruptly stopped due to Nori al-Maliki’s corruption at the CBI? Iraq hadn’t developed their economy yet. You see, Dr Shabibi understood the importance of getting the currency reform completed as early as possible as we are now witnessing the hazards of waiting this long. How could he do it then and the CBI not now?
You get my point? So, anything is possible. Yes, the impossible could happen, but I doubt it until the corruption in the U.S. is cleaned up. What do our prophets say about this too.
So, all we can do now is watch for the economy to grow and the reconstruction to take place. The funding of the budget now is also key as I told you I believe that when they start dispensing the actual money, they will want the value of the dinar at the right value. We can also follow the prophetic word to see what God is doing to America and this gives us hope. We must persevere in our daily prayers and continue to fight. WE must pray for the Iraqi people. There are some really good words from prophet Hank Kunnerman today in this regard and I hope everyone will listen to what he has to say.
Some intel gurus want you to believe the “official” dinar rate is now set at 1130 and the CBI has not yet changed their site. This is not true, however I believe this is their next target rate and maybe the last rate change prior to moving ahead once again aggressively with the plan for the reinstatement. Seems this dollar issue has stalled their plan for now but they will overcome it as they always do but it takes time.
So, what is new in Iraqi news?
The news today is all about rebuilding Iraq and exploiting the areas of concern that have potential and could bring in huge amounts of revenue to the country. Such areas are the Customs and Tariffs and the Tourism industries. Prime Minister Muhammad Shia Al-Sudani sponsored, on Sunday, the signing of a pioneering agreement with the International Finance Corporation / IFC, to develop and rehabilitate Baghdad International Airport, where the Director General of the Civil Aviation Authority signed on the Iraqi side. They will need these airports to bring in the tourists. I already showed you some of the significant tourist attractions and museums. But I only touched the surface. Iraq is an amazing country. Thre is so much more.
The researcher in economic affairs, Hashem Al-Baydani, confirmed, on Friday, that the unemployment rate will be significantly reduced in the event of proper planning for development path projects, pointing out that the revenues of this path can reduce dependence on oil as a source of financing the budget.
Mnangagwa Hints At Strengthening The Zimbabwean Dollar | Pindula (9/5/23)
President Emmerson Mnangagwa, during his inauguration and swearing-in for his final term as Zimbabwe’s President, highlighted the significance of a national currency for development. While not explicitly mentioned, his remarks hinted at a preference for the Zimbabwean dollar as the sole currency. Additionally, he indicated a focus on utilizing internal resources to foster economic growth. The future of the United States dollar in the country’s currency system remains unclear. He said:
Comrades and Friends;
The past five years have delivered valuable lessons on our intricate economy, especially the fact that a national currency that is supported by a vibrant productive sector is indispensable to sustainable development. No country has ever developed without its own currency. Further, we can only develop and grow the economy based on our own internal resources.
I urge us all to believe in ourselves and our abilities, as Zimbabweans and Africans. Development and national prosperity based on what we have is more sustainable and durable. We must take pride in who we are and what we can do for ourselves.
The numerous mineral resources in our country must be sustainably exploited to leap-frog our industrialisation and development. The lives of our citizens and the fortunes of our country as a whole must be improved. We expect nothing less.
Our economy must realise maximum benefits from increased beneficiation and value addition. As such, my new Administration, through the Responsible Mining Initiative, will ensure greater stewardship over our finite natural resources. These must benefit both present and future generations.
During his speech, President Mnangagwa did not discuss the involvement of the African Development Bank (AfDB) in debt arrears or restructuring. Zimbabwe’s consolidated debt as of June 2023 amounted to $17.5 billion, with $14.04 billionowed to international creditors and $3.4 billion in domestic debt. The country is in arrears with multilateral development banks, including the AfDB. Finance Minister Mthuli Ncube said Zimbabwe aims to clear foreign debt by December 2025 to access new lines of credit for economic revitalization. The majority of the multilateral debt comprises arrears and penalties for non-payment.
Some context on Currencies:
Zimbabwe adopted a multi-currency system in 2009 as its national currency, the Zimbabwean dollar, faced hyperinflation and devaluation. The system allowed the use of foreign currencies such as the US dollar, South African rand, and Botswana pula as legal tender. While it provided some stability, challenges like limited access to smaller denominations and reliance on external economies emerged. In 2019, the Reserve Bank of Zimbabwe reintroduced the Zimbabwean dollar as the sole legal tender, discontinuing the use of foreign currencies for most transactions.
However, the reintroduction has brought its own challenges, including inflation and currency instability. This forced the authorities to allow the use of the United States dollar together with the local currency albeit making it clear they would prefer having the Zimbabwe dollar as the sole legal tender.
Government critics including former Finance Minister Tendai Biti, argue that Zimbabwe should abandon the local currency due to its premature reintroduction without meeting the necessary prerequisites for sustainability. They propose using the US dollar as the sole legal tender until the prerequisites for reintroducing the Zimbabwean dollar are fulfilled.
These critics believe that the public lost faith in the governance of the ZANU PF government, leading to a lack of confidence in the local currency, which they predict will continue to depreciate until governance issues are addressed.
Iraq Achieves The Highest Trade Surplus In History.. An Expert Summarizes The Reasons And Clarifies The "Restrictions" - Urgent
Baghdad today - follow-up Today, Monday (September 4, 2023), economist Nabil Al-Marsoumi announced that Iraq achieved the highest trade surplus in the past year 2022, while he indicated that the trade surplus had increased unrelated to reform.
In his post, Al-Marsawi outlined the reasons for Iraq achieving the highest trade surplus in the past year, pointing out that the surplus is "the difference between merchandise exports and imports."
And he continued, "The surplus achieved for the year 2022, over the course of the history of the oil industry, which is close to a hundred years old, as the surplus amounted to 53.54 billion dollars due to the increase in oil exports in 2022 to about 120 billion dollars, of which 115 billion dollars came from crude oil exports, and 5 billion dollars most of it." of black oil exports.
Al-Marsoumi added, "This means that the increase in the trade surplus in Iraq has nothing to do with reform, development, diversification of the economy, or any self-efforts, but rather is linked to an external variable, which is oil prices, whose annual rate in 2022 reached more than $95 a barrel."
Trade Surplus
In addition, statistics conducted by the German company Statista , which specializes in market and consumer data, today, Monday (September 4, 2023), revealed that Iraq achieved the largest trade surplus for the past year 2022 over the past ten years.
The trade balance indicates the differences in imports and exports of goods in the country during the year. If the value of its exports during a period exceeds the value of its imports, it is called a surplus in the trade balance. If the total value of imports exceeds the total value of exports, it is called a deficit in the trade balance.
And the company stated in a table it published today, that Iraq achieved the highest trade surplus for goods in 2022 over the past ten years, as the surplus last year amounted to $53.54 billion, up by 64% from 2021, when the trade surplus for goods in that year reached $20.08 billion.
He pointed out that Iraq achieved a deficit in its trade balance for two years, the first in 2020, when the deficit amounted to 4.11 billion dollars, and the second in 2015, when the trade deficit amounted to 0.94 billion dollars.
And the report continued, while in 2019 the balance achieved a trade surplus of $16.62 billion, in 2018 the trade surplus reached $35.95 billion, and the trade surplus in 2017 reached $15.1 billion, indicating that the trade surplus in 2012 amounted to $35.39 billion.
Oil Export
And Iraq had achieved during the past year (2022) financial revenues of more than 115 billion dollars from the export of crude oil, to be the highest in years, according to official figures announced by the Iraqi Ministry of Oil.
According to those figures, the daily export rate amounted to 3,320,000 barrels, which is a total of one billion, 211,800,000 barrels for a full year.
Reflections
And about the repercussions of these financial revenues on the economy and the citizen, and their impact on resolving the economic crises facing the country, whose budget depends more than 95% on oil sales, the financial advisor to the Iraqi government, Mazhar Muhammad Salih, says that these revenues were subject to two restrictions in financial behavior due to the absence of the budget law for the year 2022:
The first is by adhering to Article 13 of the amended Financial Management Law No. 6 of 2019, which requires spending 1/12 of the total actual ongoing or current expenditures in the previous budget estimated at 115 trillion dinars ($70 billion).
The second restriction refers to the allocations contained in the Emergency Law for Food Security and Development No. 2 of 2022, amounting to 25 trillion dinars ($17 billion), which means that the total expenditures for 2022 amount to 140 trillion dinars ($88 billion).
Saleh explains that the remaining financial surplus from the 2022 revenues is 27 trillion dinars ($18.5 billion), and it will be an opening balance in the 2023 budget.
Sovereign Fund
For his part, the economic academic at the University of Baghdad, Ali Dadoush, stresses the need to invest the financial surplus in developing industry and agriculture and supporting the foundations of the real private sector, to operate factories and factories and produce locally manufactured goods and services, in conjunction with the gradual re-imposition of taxes on goods that are produced locally, in line with Activating the role of oversight and preventing the removal of locally produced commodities and keeping them within prices equal to or a margin lower than the prices of competing foreign commodities.
Dadush added, "All of the aforementioned is achieved through the method of balancing programs and performance with the establishment of the sovereign fund," which he considers "the first step towards diversifying the sources of the Iraqi economy."
The academic indicated that this guarantees the solution of several problems rooted in the Iraqi economy, such as unemployment and corruption, in both its financial and administrative aspects, the imbalance of the trade balance and the smuggling of foreign currency abroad.
I wrapped up this week talking about all the progress that has been made. What has been done since January. Big things like joining the World Trade organization as an observer status…which has been ongoing since 2004…in February to August we see they are gearing up for full ascension to the WTO and this is a big deal. They will be out in the world economy again and in the global financial system.
My understanding is they have the security and stability in the country…enough that we can see all the countries making deals and doing things with Iraq. …Iraq is going to make a lot of money…once they have an article 8 exchange rate …that is required…For full ascension…all of us will have a different venue in a short period of time.
Article: “Deal with the International Finance Corporation for the development and rehabilitation of the Baghdad International Airport”
It’s going to be just like the Saudi Arabia International Airport, Los Angeles International Airport. It’s going be a big hub and they’re gateway to the country…It shows a sign of sovereignty …internationalism …it’s a massive thing…When it says it’s going to qualify Baghdad as an international airport, it comes will a lot of different things. We’re not talking about an international currency at 1310. It doesn’t work that way…
Iraq is ready to go international. What we're hoping and praying for is they show us an Article VIII compliant exchange rate and show us their new currency they're going to be using in the near future. I think those new small category notes that were printed back in 2018 need to get exposed to the world...
