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IMF expected to increase Iraq's oil exports by 23%
7/11/15
Expect President of the International Monetary Fund mission to Iraq Carlo Sidr Alevich oil production growth in Iraq at a rate of 11% and increase exports by 23%, confirming the pursuit Fund to help Iraq funded "potential" of $ 830 million to be provided to Iraq under the "rapid financing instrument",
And while pointing out that Iraq continues to take steps towards "enabling the private sector", he noted that the CBI has taken steps "in line with the recommendations of the IMF to liberalize the foreign exchange market".
This came during an interview the agency, "the long-Presse", with Prime Fund mission International Monetary to Iraq Carlo Sidr Alevich, and below the full text of the dialogue.
* What is your assessment of the economy of Iraq since 2014?
- Iraq over a difficult period in the last year, where it was to deal with the double shock of the organization Daash attacks coincided with a sharp drop in global oil prices. And the conflict with Daash very serious negative impact on the economy - not to mention the human tragedy caused by the - also put pressure on the budget, which should provide a significant increase in security spending and meet What Iraq needs of a major humanitarian needs. He was influenced by Iraq shocked oil prices much higher than other oil-exporting countries, due to the severity of the Iraqi economy's dependence on hydrocarbons, where oil exports accounted for more than 93% of government revenue in 2014 and for being the driving force of performance in most areas of the non-oil economy, particularly through government spending.
Overall, the economy shrank in 2014 by 1.2%, while the non-oil economy shrank by nearly 9%. In the current year, we are more optimistic to some extent, and we expect some recovery, which is in a growth rate of 0.5%, thanks to growth in the oil sector.
In fact, the oil sector's performance in this challenging grave circumstances may surprise of many observers. In 2015, we expect that oil production is growing at a rate of 11% and oil exports increase by 23%, driven by production in southern oilfields additional oil exports, which facilitated the agreement between the Government of Iraq's Kurdistan federal government.
* Is Iraq implements reforms Fund requested during recent meetings?
- Aware of the challenges facing Iraq now, we are working in close collaboration with the Ministry of Finance and the Central Bank to perform the procedures and structural reforms necessary to deal with the impact of trauma. We recommended to correct public finances to keep spending in the availability of resources and funding limits, and the 2015 budget shows that there is a commendable effort aimed at balancing the decline in oil revenues on the one hand and pressures to increase spending on security and humanitarian needs on the other hand. In addition to fiscal adjustment, we support the government's efforts to diversify its sources of funding, internal and external alike. The Fund also seeks to help ease funding pressures through potential funding of almost $ 830 million to be provided to Iraq under the "rapid financing instrument" that allow emergency assistance to member countries when the balance of payments is facing financing needs urgent, as is the case with Iraq.
For the Central Bank Iraq, we see that the recent steps towards the liberalization of the foreign exchange market in line with our recommendations in this regard, as recommendation we made to achieve a gradual reduction in the foreign exchange market distortions, and that impose significant costs on the economy and can reduce confidence in the currency. We believe that such steps would help to reduce the foreign exchange rate differentials in the parallel market and contribute to the reduction of the volatility of these differences.
* Is Iraq has made progress in the empowerment of the private sector?
- Dr. Abadi, the prime minister, had a vision correct for the role of the private sector in the economy , which provide a source of growth is not linked to the oil sector, and job creation not in a position to provide the public sector the number of jobs that was able to be supplied before. But I do not doubt that the security situation still poses a challenge to the participation of the private sector effectively in the economy.
Even in this case, Iraq continues to take steps towards the empowerment of the private sector. And the financial sector example of this, where authorities were working to create an environment where equality between private banks and state-owned banks realized. The General entities currently accept letters of guarantee and checks guaranteed issued by private banks; it also has increased the maximum letters of credit between the Finance Ministry and private banks; and have been allowed to state-owned enterprises to deal with private banks to open accounts and the acquisition of deposits and the payment of salaries. The government has also prepared a study on the reform of state-owned enterprises which envisages a systematic assessment of the cost-benefit in order to determine the most appropriate structure for each institution, and our commitment to close the dialogue on policies with the government and central bank to help Iraq on the implementation of sound macroeconomic policies that will boost the economy hardness in this challenging daunting circumstances.
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7/11/15
Expect President of the International Monetary Fund mission to Iraq Carlo Sidr Alevich oil production growth in Iraq at a rate of 11% and increase exports by 23%, confirming the pursuit Fund to help Iraq funded "potential" of $ 830 million to be provided to Iraq under the "rapid financing instrument",
And while pointing out that Iraq continues to take steps towards "enabling the private sector", he noted that the CBI has taken steps "in line with the recommendations of the IMF to liberalize the foreign exchange market".
This came during an interview the agency, "the long-Presse", with Prime Fund mission International Monetary to Iraq Carlo Sidr Alevich, and below the full text of the dialogue.
* What is your assessment of the economy of Iraq since 2014?
- Iraq over a difficult period in the last year, where it was to deal with the double shock of the organization Daash attacks coincided with a sharp drop in global oil prices. And the conflict with Daash very serious negative impact on the economy - not to mention the human tragedy caused by the - also put pressure on the budget, which should provide a significant increase in security spending and meet What Iraq needs of a major humanitarian needs. He was influenced by Iraq shocked oil prices much higher than other oil-exporting countries, due to the severity of the Iraqi economy's dependence on hydrocarbons, where oil exports accounted for more than 93% of government revenue in 2014 and for being the driving force of performance in most areas of the non-oil economy, particularly through government spending.
Overall, the economy shrank in 2014 by 1.2%, while the non-oil economy shrank by nearly 9%. In the current year, we are more optimistic to some extent, and we expect some recovery, which is in a growth rate of 0.5%, thanks to growth in the oil sector.
In fact, the oil sector's performance in this challenging grave circumstances may surprise of many observers. In 2015, we expect that oil production is growing at a rate of 11% and oil exports increase by 23%, driven by production in southern oilfields additional oil exports, which facilitated the agreement between the Government of Iraq's Kurdistan federal government.
* Is Iraq implements reforms Fund requested during recent meetings?
- Aware of the challenges facing Iraq now, we are working in close collaboration with the Ministry of Finance and the Central Bank to perform the procedures and structural reforms necessary to deal with the impact of trauma. We recommended to correct public finances to keep spending in the availability of resources and funding limits, and the 2015 budget shows that there is a commendable effort aimed at balancing the decline in oil revenues on the one hand and pressures to increase spending on security and humanitarian needs on the other hand. In addition to fiscal adjustment, we support the government's efforts to diversify its sources of funding, internal and external alike. The Fund also seeks to help ease funding pressures through potential funding of almost $ 830 million to be provided to Iraq under the "rapid financing instrument" that allow emergency assistance to member countries when the balance of payments is facing financing needs urgent, as is the case with Iraq.
For the Central Bank Iraq, we see that the recent steps towards the liberalization of the foreign exchange market in line with our recommendations in this regard, as recommendation we made to achieve a gradual reduction in the foreign exchange market distortions, and that impose significant costs on the economy and can reduce confidence in the currency. We believe that such steps would help to reduce the foreign exchange rate differentials in the parallel market and contribute to the reduction of the volatility of these differences.
* Is Iraq has made progress in the empowerment of the private sector?
- Dr. Abadi, the prime minister, had a vision correct for the role of the private sector in the economy , which provide a source of growth is not linked to the oil sector, and job creation not in a position to provide the public sector the number of jobs that was able to be supplied before. But I do not doubt that the security situation still poses a challenge to the participation of the private sector effectively in the economy.
Even in this case, Iraq continues to take steps towards the empowerment of the private sector. And the financial sector example of this, where authorities were working to create an environment where equality between private banks and state-owned banks realized. The General entities currently accept letters of guarantee and checks guaranteed issued by private banks; it also has increased the maximum letters of credit between the Finance Ministry and private banks; and have been allowed to state-owned enterprises to deal with private banks to open accounts and the acquisition of deposits and the payment of salaries. The government has also prepared a study on the reform of state-owned enterprises which envisages a systematic assessment of the cost-benefit in order to determine the most appropriate structure for each institution, and our commitment to close the dialogue on policies with the government and central bank to help Iraq on the implementation of sound macroeconomic policies that will boost the economy hardness in this challenging daunting circumstances.
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