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The failure of monetary policy...a road map that explains the side effects of the Iraqi economic illness
Economy |Yesterday, 22:40 |
Baghdad today - Baghdad
Today, Saturday (April 6, 2024),
Professor of International Economics, Nawar Al-Saadi, revealed the
reasons for the failure of monetary policy in Iraq, indicating who bears responsibility for this failure. Al-Saadi told "Baghdad Today", "There are
several reasons for the failure of monetary policy, including
large inflation in government spending, as
government spending exceeds available revenues,
so monetary policy was affected by increased spending on infrastructure and public services without the availability of sufficient funding sources." He stated, “The
second reason is the heavy reliance on oil revenues,
which makes the Iraqi economy vulnerable to fluctuations in oil prices, which negatively affects the government’s ability to implement effective monetary policies.
In addition to the weak financial infrastructure, the banking and financial system in Iraq suffers from a traditional system that lacks Modernity in providing advanced financial services, which makes it difficult for the central bank to implement effective monetary policies to ensure economic stability.” He added, "In the case of
Iraq, the country's central bank is the body responsible for setting and implementing monetary policy, including setting the interest rate and managing the money supply. However, the
government also has a role in determining general economic policies that may affect monetary policy." Such as government spending, foreign trade policies, etc. He continued, "The
most prominent negatives, errors, and problems of monetary policy in Iraq is that Iraq is now suffering from hyperinflation. There is a
large increase in monetary supply and demand in hyperinflation, which
negatively affects the purchasing power of citizens and
weakens economic stability, not to mention the
budget deficit occurring as a result of the disparity." Spending and revenues,
Iraq faces a budget deficit that requires additional funding from the central bank or external borrowing, as happened in previous years, especially the periods of low oil and the wars with ISIS, and of course also the
exchange rate fluctuations in the last two years played a major role in instability in the financial markets and a negative impact on Investment and foreign trade.
The professor of international economics concluded by saying,
“I think it is difficult to accurately determine the losses due to the multiplicity of factors, the discrepancy in estimates, and also the conflicting numbers from the concerned parties, but the
losses could include a
loss of confidence in the currency,
unstable trading, a
slowdown in economic growth, and an
increase in public debt as a result of the budget deficit.” "Inflation will increase, and
these losses could reach billions of dollars annually,
which makes the need for serious reforms in monetary policy urgent in Iraq."
https://baghdadtoday.news/246569-فشل-السياسة-النقدية.-خارطة-طريق-تفسّر-الاعراض-الجانبية-لمرض-الاقتصاد-العراقي.html
Economy |Yesterday, 22:40 |
Baghdad today - Baghdad
Today, Saturday (April 6, 2024),
Professor of International Economics, Nawar Al-Saadi, revealed the
reasons for the failure of monetary policy in Iraq, indicating who bears responsibility for this failure. Al-Saadi told "Baghdad Today", "There are
several reasons for the failure of monetary policy, including
large inflation in government spending, as
government spending exceeds available revenues,
so monetary policy was affected by increased spending on infrastructure and public services without the availability of sufficient funding sources." He stated, “The
second reason is the heavy reliance on oil revenues,
which makes the Iraqi economy vulnerable to fluctuations in oil prices, which negatively affects the government’s ability to implement effective monetary policies.
In addition to the weak financial infrastructure, the banking and financial system in Iraq suffers from a traditional system that lacks Modernity in providing advanced financial services, which makes it difficult for the central bank to implement effective monetary policies to ensure economic stability.” He added, "In the case of
Iraq, the country's central bank is the body responsible for setting and implementing monetary policy, including setting the interest rate and managing the money supply. However, the
government also has a role in determining general economic policies that may affect monetary policy." Such as government spending, foreign trade policies, etc. He continued, "The
most prominent negatives, errors, and problems of monetary policy in Iraq is that Iraq is now suffering from hyperinflation. There is a
large increase in monetary supply and demand in hyperinflation, which
negatively affects the purchasing power of citizens and
weakens economic stability, not to mention the
budget deficit occurring as a result of the disparity." Spending and revenues,
Iraq faces a budget deficit that requires additional funding from the central bank or external borrowing, as happened in previous years, especially the periods of low oil and the wars with ISIS, and of course also the
exchange rate fluctuations in the last two years played a major role in instability in the financial markets and a negative impact on Investment and foreign trade.
The professor of international economics concluded by saying,
“I think it is difficult to accurately determine the losses due to the multiplicity of factors, the discrepancy in estimates, and also the conflicting numbers from the concerned parties, but the
losses could include a
loss of confidence in the currency,
unstable trading, a
slowdown in economic growth, and an
increase in public debt as a result of the budget deficit.” "Inflation will increase, and
these losses could reach billions of dollars annually,
which makes the need for serious reforms in monetary policy urgent in Iraq."
https://baghdadtoday.news/246569-فشل-السياسة-النقدية.-خارطة-طريق-تفسّر-الاعراض-الجانبية-لمرض-الاقتصاد-العراقي.html
