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IMF Executive Board Completes First Review of Iraq's Stand-By Arrangement
Press Release No. 08/199
September 3, 2008
The Executive Board of the International Monetary Fund (IMF) today completed the first review of Iraq's Stand-By Arrangement (SBA), Which is Designed to support the country's Economic program-through March 2009. The Board completed a financing assurances Also review under the SBA. The SDR 475.36 million (about U.S. $ 746.3 million) arrangement in December 2007 Approved WAS. It is Being Treated as precautionary by the Authorities (see Press Release No. 07/301 ), and no purchase is planned.
As part of the completion of the first review, the Board Approved Also Iraq's request for a waiver of an end-June 2008 quantitative performance on the Criterion Government wage and pension bill.
Following the Executive Board's discussion of Iraq's Economic Performance, Mr. Takatoshi Kato, Deputy Managing Director and Acting Chair, said:
"After Several years very apologetic, Economic Prospects for Improving and Iraq are the Authorities are persevering With The Implementation of Their Economic program in 2008. With the recent improvement in security, oil production and exports are while inflation Has Been Increasing reduced. The Strengthened fiscal and external positions offer Iraq a good Opportunity to rebuild its Institutions and Infrastructure in order to Achieve Sustained Economic Growth Higher. The success of These Endeavors will hinge on continued Improvements in security, sound management of oil Revenues, and Implementation of key structural Reforms.
"To Accelerate Economic reconstruction and meet other pressing Needs, the supplementary budget for 2008 Provides for a sizable increase spend spending. The additional investment, Following Several years of underinvestment public, is welcome But will require vigilance to Ensure That the quality of public investment is Maintained . A civil service salary increase will be phased in over 2008 and 2009 in order to Avoid overheating the economy. To keep inflation under control, the Central Bank of Iraq will tighten STI Monetary Policy stance, by Increasing the pace Notably appreciation of the dinar of STI policy and by keeping interest rate positive in real terms.
"Some Were Increased fuel prices in mid-2008, and the Government intends to raise fuel prices early next other year to reduce still-sizable indirect fuel subsidies. The Fund stands ready to assist the Authorities in Developing an Appropriate Adjustment Mechanism for setting domestic fuel prices.
"It will be Important to step up the pace of structural reform. Of particular urgency are the early adoption of a Comprehensive Reform Plan for Modernizing Public Financial Management, the finalization of the census of public service employees to Eliminate ghost Workers, and the streamlining of the in-kind Public Distribution System. In the Financial sector, Restructuring programs for two major commercial banks based on the Financial and Operational Audits completed Should be taken forward, and the set of prudential Regulations for commercial banks completed. Establishment of a new Legislative framework for the hydrocarbon industry will Facilitate Investments in the sector.
"Progress Has Been Made in Strengthening governance and fighting corruption in the hydrocarbon sector-through oil-metering and Iraq's participation in the Extractive Industries Transparency Initiative. An extension of the metering system to all oil industry will weitere Strengthen Transparency Activities in the sector.
"The central bank intends to continue to Implement the recommendations of the IMF's Safeguards Assessment Report and the external audit report of ITS 2007 Financial Statements. The adoption of reserves management guidelines is an Important step In This Regard.
"The Authorities are making commendable Efforts to Conclude Agreements debt with Paris Club official and non-private creditors That Have not yet provided debt relief to Iraq," Mr. Kato said.
Press Release No. 08/199
September 3, 2008
The Executive Board of the International Monetary Fund (IMF) today completed the first review of Iraq's Stand-By Arrangement (SBA), Which is Designed to support the country's Economic program-through March 2009. The Board completed a financing assurances Also review under the SBA. The SDR 475.36 million (about U.S. $ 746.3 million) arrangement in December 2007 Approved WAS. It is Being Treated as precautionary by the Authorities (see Press Release No. 07/301 ), and no purchase is planned.
As part of the completion of the first review, the Board Approved Also Iraq's request for a waiver of an end-June 2008 quantitative performance on the Criterion Government wage and pension bill.
Following the Executive Board's discussion of Iraq's Economic Performance, Mr. Takatoshi Kato, Deputy Managing Director and Acting Chair, said:
"After Several years very apologetic, Economic Prospects for Improving and Iraq are the Authorities are persevering With The Implementation of Their Economic program in 2008. With the recent improvement in security, oil production and exports are while inflation Has Been Increasing reduced. The Strengthened fiscal and external positions offer Iraq a good Opportunity to rebuild its Institutions and Infrastructure in order to Achieve Sustained Economic Growth Higher. The success of These Endeavors will hinge on continued Improvements in security, sound management of oil Revenues, and Implementation of key structural Reforms.
"To Accelerate Economic reconstruction and meet other pressing Needs, the supplementary budget for 2008 Provides for a sizable increase spend spending. The additional investment, Following Several years of underinvestment public, is welcome But will require vigilance to Ensure That the quality of public investment is Maintained . A civil service salary increase will be phased in over 2008 and 2009 in order to Avoid overheating the economy. To keep inflation under control, the Central Bank of Iraq will tighten STI Monetary Policy stance, by Increasing the pace Notably appreciation of the dinar of STI policy and by keeping interest rate positive in real terms.
"Some Were Increased fuel prices in mid-2008, and the Government intends to raise fuel prices early next other year to reduce still-sizable indirect fuel subsidies. The Fund stands ready to assist the Authorities in Developing an Appropriate Adjustment Mechanism for setting domestic fuel prices.
"It will be Important to step up the pace of structural reform. Of particular urgency are the early adoption of a Comprehensive Reform Plan for Modernizing Public Financial Management, the finalization of the census of public service employees to Eliminate ghost Workers, and the streamlining of the in-kind Public Distribution System. In the Financial sector, Restructuring programs for two major commercial banks based on the Financial and Operational Audits completed Should be taken forward, and the set of prudential Regulations for commercial banks completed. Establishment of a new Legislative framework for the hydrocarbon industry will Facilitate Investments in the sector.
"Progress Has Been Made in Strengthening governance and fighting corruption in the hydrocarbon sector-through oil-metering and Iraq's participation in the Extractive Industries Transparency Initiative. An extension of the metering system to all oil industry will weitere Strengthen Transparency Activities in the sector.
"The central bank intends to continue to Implement the recommendations of the IMF's Safeguards Assessment Report and the external audit report of ITS 2007 Financial Statements. The adoption of reserves management guidelines is an Important step In This Regard.
"The Authorities are making commendable Efforts to Conclude Agreements debt with Paris Club official and non-private creditors That Have not yet provided debt relief to Iraq," Mr. Kato said.
