Tuesday, September 10, 2024
DINAR REVALUATION REPORT: The Fragile State of the Iraqi Economy in 2024 and Proposed Solutions, 11 SEPT
The Fragile State of the Iraqi Economy in 2024 and Proposed Solutions
As of September 10, 2024, the Iraqi economy is facing significant challenges that have raised concerns among economists and policymakers alike. The economy has been heavily reliant on oil revenues, which account for over 99% of exports, 85% of the government budget, and 42% of gross domestic product. This over-dependence on oil has left the country vulnerable to macroeconomic volatility and restricted fiscal space for countercyclical policy measures.
The Current State of the Iraqi Economy
The most recent data from January 2021 showed that Iraq's unemployment rate was more than 10 percentage points higher than its pre-COVID-19 level of 12.7 percentage points. The economy has been gradually recovering from the oil and COVID-19 shocks of 2020, with real GDP estimated to have increased by 1.3% in 2021, following a sharp contraction of 11.3% in 2020. The non-oil economy grew by over 6% in the first nine months of 2021, driven by a robust performance in the services sector as COVID-19 restrictions were eased.
The Risk of Economic Collapse
Economic researcher Manar Al-Obaidi has identified eight hidden weaknesses in the Iraqi economy, which he believes could lead to its collapse. Al-Obaidi argues that the collapse is not a future event but rather a process that has been ongoing for a long time, exacerbated by fluctuations in oil prices. The sustainability of the Iraqi economy is primarily threatened by its lack of diversity in revenue sources and the mismanagement of expenditures.
Proposed Solutions
To address the challenges and prevent a full-scale economic collapse, several solutions have been proposed by experts and policymakers. These include:
- Diversification of the Economy: Reducing dependence on oil by developing other sectors such as agriculture, tourism, and manufacturing.
- Fiscal Reforms: Implementing measures to control government spending, improve tax collection, and mobilize non-oil revenues.
- Private Sector Engagement: Encouraging the growth of the private sector by creating a business-friendly environment, reducing bureaucratic red tape, and attracting foreign investment.
- Job Creation: Focusing on creating productive job opportunities, particularly for the youth and women, to reduce unemployment.
- Anti-Corruption Measures: Strengthening transparency and accountability to reduce corruption and improve the overall business climate.
Conclusion
The Iraqi economy has been facing significant challenges, exacerbated by its heavy reliance on oil revenues and the impact of the COVID-19 pandemic. To prevent a potential collapse and achieve long-term stability, the country must implement comprehensive reforms aimed at diversifying its economy, improving fiscal management, and fostering a more vibrant private sector.
An Economist Warns Of The Collapse Of The Iraqi Economy And Provides Solutions, 11 SEPT
Economy | 09/09/2024 Mawazine News – Baghdad An economic researcher considered the existence of 8 hidden weaknesses in the Iraqi economy, in a comment on fears of the collapse of the economy,
describing that the collapse essentially occurred a long time ago, and fluctuations in oil prices prolong or accelerate the final collapse.Economic researcher Manar Al-Obaidi said in a statement that with the decline in oil prices and the unprecedented rise in operating expenses to reach a growth rate in current expenditures exceeding 30% and a decline in revenues by 16%, the most important question arises:
Is the Iraqi economy facing a crisis or collapse?
The sustainability of any economy depends primarily on the diversity of its sources and the control and planning of its expenditures.”
He continued, “We cannot expect the sustainability of an economy in which more than 500,000 researchers enter the labor market annually and is unable to create productive job opportunities with more than 20 to 30 thousand opportunities as a maximum, and an economy based on sales of one commodity and whose prices are not controlled through One port and only two countries.”
He described the Iraqi economy as “an
economy based on a deteriorating business environment with no role for the private sector in turning the wheel of the economy, an
economy that adopts the private sector and pastoral laws and legislation and gives preference to the public sector, a
consumer economy based on an unprecedented consumption pattern without production having a role, an
economy that employs more than 6 million employees with almost non-existent productivity, an
economy marred by corruption, lack of transparency and inequality of opportunities, an
economy that does not have foreign investments and is unable to attract them.” He concluded:
“The collapse occurred a long time ago, and the
fluctuations that are occurring in oil prices are merely prolonging or accelerating the collapse process, and the
manifestations of the collapse will be faster than the decline in oil prices.” https://www.mawazin.net/Details.aspx?jimare=254671
Coffee with MarkZ. 09/10/2024
IRAQ BOOTS OM THE GROUND REPORT BY FIREFLY, 10 SEPT
Frank26
[Iraq boots-on-the-ground report]
FIREFLY: CBI is talking about a mechanism to terminate the electronic platforms.
FRANK: That's right. They can't steal the money through that method anymore. This is fantastic...The American dollar and the dinar are now being protected from those that were stealing it, from Iran. Because that was the US Treasury's #1 requirement. We called it security and stability and so did Dr. Shabibi... ;
FIREFLY:A big delegation including Alaq...He went to Erbil for the economic meeting. There was a closed meeting after the main meeting. We expect it was mainly about the oil and gas HCL they have been talking to us about.
FRANK: This is all monetary reform education.
DINAR REVALUATION REPORT: THE REDUCTION IN INFLATION CONTRIBUTES TO STRENGTHENING THE VALUE OF THE IRAQI DINAR, 10 SEPT
Iraq's Economic Growth and Inflation Rates in 2024: The Role of Central Bank Decisions
In 2024, Iraq's economy continues to demonstrate resilience and growth, significantly influenced by the decisions of the Central Bank.
A key figure in this context is Mazhar Mohammed Saleh, the financial advisor to the Prime Minister, who has explained that the Central Bank's decisions have played a pivotal role in reducing inflation rates in the country.
This reduction in inflation not only benefits the general public by stabilizing prices but also contributes to strengthening the value of the local currency, offering a more stable economic environment.
Economic Growth and Fiscal Policies
According to the International Monetary Fund (IMF), economic growth in Iraq is projected to continue, supported by a fiscal expansion policy. This expansion is critical in absorbing the rapidly growing labor force, boosting non-oil exports, and broadening the tax base. The authorities are advised to focus on enabling private sector development, including reforms in labor markets, modernization of the financial sector, and restructuring of state-owned banks, along with reforms in the pension and electricity sectors.
Inflation Rates and Central Bank's Role
Inflation rates in Iraq have been on the decline, dropping from 7.5% in January 2023 to more stable levels, as reported by the official spokesman for Iraq's Ministry of Planning, Abdul Zahra Al-Hindawi. This decrease is credited to the effective decisions made by the Central Bank, which have contributed to stabilizing the economy. The Bank's strategies have not only reduced inflation but have also played a crucial role in strengthening the local currency, thereby enhancing the country's economic stability.
Outlook and Challenges
Despite the positive outlook, medium-term vulnerabilities associated with oil price volatility have increased significantly. Reducing oil dependence and ensuring fiscal sustainability while protecting critical social and investment spending will require a significant fiscal adjustment. The focus should be on controlling the public wage bill and increasing non-oil tax revenues.
Conclusion
In summary, Iraq's economic growth and the stabilization of inflation rates in 2024 are attributed to the strategic decisions of the Central Bank. These decisions have not only reduced inflation but have also contributed to strengthening the local currency. However, challenges remain, particularly in diversifying the economy and ensuring fiscal sustainability.
DINAR REVALUATION REPORT: STUNNING REFORMS IN IRAQ, 25 NOV
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Frank26 [Bank story] This time we didn't go down, we just called [the bank]... We said we want to see if we can exchange some cu...
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Bank appointment for Currency EXCHANGE Instructions/Checklist Bank Name_________________________________________ Bank 800#____________...
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Walkingstick All these meetings that the CBI had with all these agencies that were helping them with their monetary reform are done. Al...