In 2024, Iraq's economy has undergone a significant transformation, with a marked recovery and a notable decline in internal and external debts.
Economic Recovery
Iraq's economic recovery in 2024 is attributed to several factors, including the stabilization of domestic inflation, which fell to 4% by the end of 2023, and a strong recovery in the non-oil sector after a contraction in 2022. The International Monetary Fund (IMF) projects that Iraq's real GDP growth will reach 1.4% in 2024 and accelerate to 5.3% in 2025. This growth is expected to be driven by a large fiscal expansion starting in 2023, facilitated by Iraq's first three-year budget since the new government took office in October 2022.
Debt Levels
Despite the positive economic outlook, Iraq's fiscal deficit is projected to widen to 7.6% of GDP in 2024 from 1.3% in 2023, primarily due to lower oil prices and increased government spending. Public debt is expected to increase significantly, from 44% of GDP in 2023 to 86% by 2029. However, the IMF notes that Iraq's debt level, while rising, is relatively manageable compared to global standards.
Internal Debt
Iraq's internal debt surpassed 70 trillion dinars in 2023, reaching the highest point since 2003.
Approximately 37% of this debt arises from loans granted by commercial and government banks, with the remaining 62% owed by government institutions to the Central Bank of Iraq. A critical concern is that most of these debts are operational expenses rather than investments, resulting in additional costs for the state budget in the form of interest payments imposed by internal and external creditors.
Outlook and Challenges
The ongoing fiscal expansion is expected to boost growth in 2024, at the expense of a further deterioration of fiscal and external accounts and Iraq's vulnerability to oil price fluctuations. Without policy adjustment, the risk of medium-term sovereign debt stress is high, and external stability risks could emerge.
Key Downside Risks
Key downside risks include much lower oil prices or a spread of conflict in the region. To mitigate these risks, Iraq requires an ambitious fiscal adjustment to stabilize debt in the medium term and rebuild buffers.
Unprecedented renaissance.. Iraq's economy recovers and its debts fall to "lowest levels"
The country has witnessed an unprecedented economic renaissance, as ambitious government plans have achieved remarkable successes, most notably food security, achieving self-sufficiency in grains, stimulating markets and creating competition between them, in addition to economic growth and reducing foreign debt to its lowest levels.
The financial advisor to the Prime Minister, Mazhar Muhammad Salih, said: “The government has worked to establish a solid food security system based on the successful integration of agricultural and financial policies,” indicating that “government support for grain producers has been a safety valve in encouraging agricultural production of grain crops, which in turn has encouraged farmers to provide nearly 6 million tons of grains during the year 2024, which is the quantity that matches the country’s need for grains, and is considered one of the gateways to self-reliant food security,” according to the official agency.
He explained that "these measures were accompanied by providing the food basket with types and quantities that affect the lives of 40 million citizens, in addition to the move to revive the markets, which is a type of competitive commercial investment."
He pointed out that "the General Company for Central Markets is one of the formations of the Ministry of Trade, as it announced its new policy last March, that it will continue to refer its sites and markets to investment in accordance with the requirements of Investment Law No. 13 of 2006, as amended, in order to achieve economic balance and support the Iraqi consumer."
He added that "the marketing policy of the General Company for Central Markets, through the strategy of partnership between the state and the private sector, has undertaken to activate a pattern of market stability by providing competitive marketing outlets that meet the needs of the poor and low-income classes, through the best consumer products in terms of quality assurance and price stability," stressing that "this issue is consistent with the pivotal role played by the Competition and Anti-Monopoly Council issued under Law 14 of 2010, which aims to protect purchasing rights from monopoly and manipulation."
He added, "The supervisory and regulatory role of the Ministry of Commerce in regulating central markets comes within the framework of what can be called (competitive central consumer markets), which are markets that witness strong competition between companies and sellers to provide consumer products and services, as companies compete to offer the best prices, and ensure product quality and quality services to attract consumers, which leads to improving the overall consumer experience."
He added, "Competitive central markets that operate on the basis of investment by the private sector are characterised by the following:
1- Diversification of products, by providing a wide range of products and services from different brands.
2- Creating a sustainable climate of competitive prices and suppressing monopoly, as sellers will seek to offer price promotions and discounts to encourage customers to buy.
3- Providing logistical services to consumers, which are added services such as delivery services, loyalty programs, or after-sales services that increase the attractiveness of the market.
He added, "Companies displaying their products in competitive central markets will practice 'innovation' by offering new or innovative solutions to their products or how they are presented, to remain attractive in a new climate of competition in organised markets."
He noted that "competitive central markets will rely on strong distribution systems to provide access to them, enabling consumers to easily access the products offered by central markets."
He added, "Competitive investment-based central markets will enable companies with solid brands to benefit from the capacity and role of central markets throughout the country to always offer something distinctive that suits the lifestyle and ways of life by improving their products using the best technologies to increase their market share."
As for indicators of stability and economic growth, Saleh stated that “growth in the non-oil GDP has reached 6 percent, in light of the very moderate price growth rate, and according to the latest figures, it has only exceeded 3.7 percent annually, which means that the country is witnessing high price stability and development.
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He pointed out that "Iraq's external debts have fallen to their lowest level in the last forty years, not exceeding $10 billion, and the government is following a precise program to settle the external debt, which constitutes less than 9 percent of the country's total foreign exchange reserves, which are close to $108 billion, and are the highest foreign reserves in the country's monetary and financial history."
For his part, researcher and specialist in financial and banking affairs, Mustafa Hantoush, confirmed that “the Iraqi economy during the past three years has witnessed a number of correct trends, including:
1- Supporting the private sector with Law No. 18 of 2023 (Workers’ Retirement), which will guarantee retirement rights for all workers in Iraq.
2- Supporting the culture of electronic payment that would provide high-level financial and banking services to the citizen, as well as determining the liquidity position and having a financial reading of the market.
3- Work seriously to complete the designs and requirements for starting the (Development Road) project, which is considered the basis for opening the transportation economy to Iraq, and which is a complementary project to the Faw Port.
4- Establishing the (Service Effort) Committee, which provided tangible services in the capital, Baghdad, after long years of neglect, which would stimulate the labor and construction market in the capital and reduce transportation costs and time.
5- Heading towards residential complexes (adjacent to cities) and renegotiating with the Korean Hano Company.
He pointed out that, "Despite these measures, the Iraqi economy still needs many steps, including:
1- Effective monetary policies (lending - attracting deposits - financing investment) that would create a cash cycle from surplus to deficit.
2- Building the private sector through an accelerated pace using models (private sector budget - loan budget) that will activate the infrastructure of the private sector (cities or industrial or agricultural or tourist areas - roads to serve investment - investment electricity) with an available and known loan budget with reasonable conditions.
3- Protecting the local product through (the state purchasing the local product - closing borders and unofficial outlets - industrial and agricultural dollars).
4- Effective international negotiation on files such as (producing 25 thousand megawatts of electricity on credit with Siemens - establishing the international company for the port of Faw - increasing Iraq’s share of oil production and export).
5- Establishing a sovereign investment fund (domestic) in dollars after negotiating with the American side, to which part of the oil revenues in dollars will go and which will be invested in safe local investments such as (real estate - oil and gas investments) and others.
6- Establishing a real estate policy consisting of (real estate reconciliation with agriculture - supporting economic construction complexes - distributing land to those entitled to it - launching funding for well-studied housing initiatives).
In turn, researcher and academic Haitham Al-Khazaali explained that “the political stability that resulted from the government’s balanced policy, avoiding crisis management and focusing on achieving economic progress is what affected the stability of the security situation and then achieved economic stability.”
He added, "The economy is linked to security and reliance on political stability link
“I have been given a date ofWed. 21 Aug.for the revaluation of the Iraqi dinar. The bond holder remains excited about the possibility he will get paid today.”
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MIKE BARA
A contact went to the bank (Big 4) today to buy more currency.
He was told by the manager, who acknowledges the RV, not to bother, because he would be coming back to exchange in "two days."
Same contact was also told that "this week" the market would drop "2,000 points."
That's not enough to make an impact. I think he misheard and was told the market would drop TO 2,000 POINTS. Don't forget, Andy Schectman predicted this on my interview with him two weeks ago. (link below).
He said the US markets could drop to the value of Gold, which is around $2,454 an ounce.
Also hearing the Crowdstrike hackers got access to the crash protection algorithms, and that when the plunge begins, they won't be able to halt trading. This is how it will be portrayed anyway.
Thank you MarkZ for all your time, and encouragement daily….. PDK
MarkZ Update- Some highlights by PDK-Not verbatim
MarkZ Disclaimer: Please consider everything on this call as my opinion. People who take notes do not catch everything and its best to watch the video so that you get everything in context. Be sure to consult a professional for any financial decisions
Member: Well good morning to all today….. the question of the day will it happen tomorrow
Member: Feels like Groundhog Day every day.
Member: Sure would be nice to know when this is coming.
MZ: The news is staying consistent….We just want it now. There is nothing negative though….I am still hearing a lot of chatter about between now and the 15th. A lot of well- connected people still think this is a high possibility.
MZ: I thought this was interesting “ Iraq and Iran to create a new economic city.” This is similar with what China did when they were experimenting building new cites for new systems for economies, governments ect……They created enterprise zones like Shanghai and Hong Kong. I think this is great for Iraq and Iranian people….
MZ: “ BRICS confirms 159 participants and will adopt new payment system” So a new payment system for countries to get around the SWIFT system. And the launch is coming. Think about this…. …. The western banking system and SWIFT have ruled the world for quite some time. 159 countries stepping out of it….thats 3/4ths of the world leaving the SWIFT system…..and all of those commodities stepping out of that system …If you don’t think we are winning…you are not paying attention.
MZ: They have laid the groundwork…We are watching these nations aggregate the gold …and they are openly stating they will move to a gold backed system with 40% gold and 60 % a basket of currencies. Very much asset backed compared to what we have now.
Member: I wonder with all these countries going to a gold backed currency… why is the U.S. going to be the last one?
Member: If the rest of the world goes gold backed- The US will be forced to as well…or have no one to trade with……The rest of the world does not want worthless fiat moneybacked by nothing.
Member: Seen a commercial for TD for 5% interest on investment as we prepare to move to gold standard
Member: I heard many groups have received money but it’s not spendable yet?
MZ: I have heard some saying they have received money but not allowed to distribute it yet.
Member: That seems to confirm the “shotgun start”!!
Member: Is this our week Mark?
MZ: I pray this is our week. We don’t know for sure if it is or isn’t….but I will keep plugging no matter what.
Member: Mark a couple months ago you said that you thought this has "started" Do you still feel the same now?
MZ: I still absolutely think it has started.
Member: Mike Bara posted last night bonds are moving
Member: Could it be that it goes live at the start of the 4th quarter since it’s the new fiscal year ? Starts oct 1st.
Member: Kuwait say that they weren't reevaluating for a while and low and behold they revalued!!
Member: Mark, so many are running out of gas. Some are giving up. I don’t think many of us have much left in the tank
MZ: I hear you…..But the only option is to give up. I know in the end we win and fundamentals rule.
Member: I’ve been feeling beat (out of gas) too. But I re-grouped, prayed….Keep the faith and be open to receive hope.
Member: Giving up is not an option.
Meber: Thanks Mark and mods….Everyone enjoy your day
THE CONTENT IN THIS PODCAST IS FOR GENERAL & EDUCATIONAL PURPOSES ONLY&NOT INTENDED TO PROVIDE ANY PROFESSIONAL, FINANCIAL OR LEGAL ADVICE. PLEASE CONSIDER EVERYTHING DISCUSSED IN MARKZ’S OPINION ONLY
[via PDK] ...my expected window opens today…(11th through the 15th).
Question: Is your gut still screaming between the 11th and the 15th?
MarkZ: Yes it is…. I know that chatter from Iraq has been fantastic.
MarkZ
[via PDK]
...article from Baghdad today: “It will turn the parallel market upside down-
Sources: Expected decisions from the Central Bank will confuse markets and raise exchange rates”
When they say raise exchange rates…they are talking “in the wrong direction”...
So if one US dollar now equals 1310 dinar…it will go to one US dollar equals 1500 dinar or so.
So what they are going to do is have an auction on US dollars. They are planning on injecting more US dollars into the markets and buy dinar off of the streets.
“To help support the exchange rate” is the claim. And to help clean up the sanctions and money laundering
Think about this. It will hurt the value of the dinar temporarily but allows them to buy it at a discount through major auctions. Suck trillions more dinar off the streets…What a great prep going into a re-valuation. It will help them justify a higher value.This may be major for us.
This is my theory and I think it makes sense.
Comment: Sounds like bad news to me…like they won’t RV for weeks now.
MarkZ: If auctions are immediate - they could be ready in a day or two. I believe they will move forward quickly on this... Remember Sudani said just last week that they plan to revalue this year during his administration….I think the timing is great and they are setting the stage.
🛡️ Reserves exceed international standards, enhancing investor confidence.
🌍 Strong reserves signal economic viability to global investors.
🏭 Government urged to stimulate local industries over imports.
🔄 Diversifying the economy could strengthen the Dinar’s value.
🎉 Weekly giveaway for viewers to engage with the channel.
Key Insights
💵 Financial Security: Iraq’s $113 billion reserves allow for a year of expenses without new revenue, showcasing fiscal health. This stability is crucial for the Dinar’s strength.
🚀 Investor Confidence: The significant reserves signal to international markets that Iraq is economically viable, potentially attracting foreign investments and driving growth.
🌱 Economic Diversification: By investing reserves into local industries, Iraq can reduce oil dependency and create job opportunities, fostering long-term economic stability.
🔒 Crisis Preparedness: Having reserves that exceed the standard six-month cover demonstrates Iraq’s preparedness for emergencies, reassuring citizens and investors alike.
📊 Currency Strength: Strong financial backing may facilitate a revaluation of the Dinar, making it more attractive in the global market.
🤝 Global Relationships: Maintaining large reserves enhances Iraq’s international relationships, positioning it as a stable investment destination.
🔄 Domestic Growth: Prioritizing local economic activity over imports could stimulate growth and self-sufficiency, ultimately benefiting the currency’s valuation.
AL-SUDANI, THE PRIME MINISTER OF IRAQ, ISSUES A NUMBER OF DIRECTIVES WITHIN THE FRAMEWORK OF DEVELOPING ELECTRONIC PAYMENT SYSTEMS
Prime Minister Mohammed Shia al-Sudani directed, today, Saturday, to take a package of measures and directives to develop electronic payment systems and services and follow up on their implementation by specialized committees.
A government source said, according to the official agency: “Within the framework of Prime Minister Mohammed Shia al-Sudani’s continuous follow-up to the development of electronic payment systems and services, and in light of his review of the field supervisory reports related to the implementation of these services in various Iraqi ministries and institutions, he directed to take a package of relevant measures and follow up on their implementation by specialized committees.”
He added, “The directives were as follows:
1.Directing the Ministry of Planning,in cooperation with the Central Bank of Iraq and the World Bank, to create a national budget allocated to support and develop digital payment systems across the country.
2.Directing all ministries, including the Central Bank of Iraq, to prepare an electronic cash flow statement periodically to ensure financial transparency, determine liquidity and manage risks, which contributes to improving financial planning. 3.Directing ministries and government institutions to establish strategic partnerships with banking and non-banking financial institutions as well as technology institutions and adopt effective action steps for cooperation and exchange of proposals and expertise.
4.Obligating financial and banking institutions to develop their technical and digital systems in accordance with the latest international standards, including strengthening anti-money laundering and anti-fraud systems; in order to ensure operational efficiency, improve the quality of banking services and achieve full compliance with regulatory controls.
5.Obligating financial and banking institutions to develop cyber protection systems and adopt the cyber resilience document, with strict adherence to the controls issued by the Central Bank regarding electronic governance, to ensure comprehensive protection of banking systems against cyber threats and ensure business continuity in the face of crises.
6.Directing ministries and government institutions to develop capable government work teams to follow up on electronic payment operations on a daily basis through training and qualification, and through specialized system portals provided by payment services companies.
7.Directing the Ministry of Communications to cooperate with ministries and government institutions to expedite the adoption of the Electronic Signature and Electronic Transactions Law No. 78 of 2012 to be compatible with the requirements of electronic payment and collection settlements in the Ministry of Finance in cooperation with the Central Bank of Iraq.
8.Instructing the Ministry of Finance to submit a study on the mechanisms for creating intermediate accounts, adopted by government institutions as a mechanism for dealing with restricted government accounts to solve the problem of interruptions for citizens in the event of failure of financial operations.
9.The Central Bank shall issue directives to private and government banks to deal transparently and not discriminate between electronic payment companies.
10.The Central Bank of Iraq shall prepare what is necessary to cancel the prepaid ceilings for cards used locally to ensure wider and more flexible use.
11.Directing ministries and government institutions to establish specialized units within government departments to facilitate financial matching and settlements and resolve disputes arising from electronic payment, in coordination with banks.
12.Directing the Integrity Commission to intensify monitoring of collection points in government departments to ensure transparency and integrity.
13. Directing the Financial Supervision Bureau to develop and legislate administrative and financial updates that are compatible with electronic payment systems and to follow up on them on an ongoing basis.
14. Emphasizing on government institutions and electronic payment service provider companies to implement the paragraphs contained in the electronic financial collection and collection agreements according to the responsibilities of each party contained in those agreements.
15. Directing government banks to complete the activation of the comprehensive banking system to improve financial and administrative performance.
16. Obligating all ministries and government institutions to adopt advanced electronic administrative and accounting systems to enhance efficiency and transparency.
(I just want to ask you one question. Do you think the implementation of the Electronic Signature and Electronic Transactions Law No. 78 of 2012 is important prior to getting the RV and reinstatement? This is literally almost all they are talking about these days. YES, its important!!!!! 😊 Let’s follow its implementation then and see where it gets us. Can they complete it by eary 2025?)
