Middle East and Central Asia > Iraq

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International Monetary Fund. African Dept.
This paper discusses Central African Republic’s (CAR) Request for a Three-Year Arrangement Under the Extended Credit Facility. Consistent with the IMF’s Country Engagement Strategy, the IMF-supported program is expected to support the implementation of the peace agreement and of CAR’s medium-term development strategy. Its main objectives are to maintain macroeconomic stability, strengthen administrative capacity, governance, and the business climate, and address CAR’s protracted balance of payments needs. Fiscal policy will focus on revenue mobilization, spending prioritization, and strengthening public financial management, with a view to allow, over the medium term, the durable financing of CAR’s considerable security, social, and infrastructure spending needs. Structural reforms will aim at improving the government’s capacity to design and implementing policies and reforms, at enhancing governance, including through strengthening anticorruption institutions, and at removing bottlenecks and regulatory impediments to private investment. The new arrangement will also help catalysing external concessional financing from other development partners, which is critical to support CAR’s path out of fragility. The IMF will also continue its extensive capacity development on priorities that are aligned with the program objectives.
International Monetary Fund. Middle East and Central Asia Dept.
This 2019 Article IV Consultation and Proposal for Post-Program Monitoring highlights that Iraq’s social conditions remain harsh following the war with ISIS, with slow progress at reconstruction, weak public services and a lack of job opportunities. In the absence of policy changes, a widening budget deficit is expected to divert resources away from essential investment to rebuild the country and improve public services, while eroding reserves and posing risks to medium-term sustainability. Expenditure rigidities and limited fiscal buffers imply a significant vulnerability to oil price shocks in a context of volatile prices. The fiscal and external positions are expected to continue to deteriorate over the medium term absent policy changes—with reserves falling below adequate levels and fiscal buffers eroded. In a context of highly volatile oil prices, the major risk to the outlook is a fall in oil prices which would lower exports and budgetary revenues, leading to an even sharper decline in reserves or higher public debt. Geopolitical tensions, the potential for social unrest in a context of weak public services and lack of progress in combatting corruption pose further risks.
International Monetary Fund. Middle East and Central Asia Dept.
This paper discusses Jordan’s Request for an extended arrangement under the Extended Fund Facility (EFF). The economic growth of Jordan remains below potential. Unemployment is high, particularly for youth and women, and the refugee crisis is weighing on the economy and public finances. Real GDP growth is projected to increase to 2.8 percent in 2016, supported by lower oil prices relative to their 2014 peak, an accommodative monetary stance, and some recovery in private investment. In view of Jordan’s balance of payment needs, the policy actions already taken, and the comprehensive package of adjustment measures proposed by the authorities, the IMF staff supports the authorities’ request for an extended arrangement under the EFF.
International Monetary Fund. African Dept.
This 2016 Article IV Consultation highlights that economic growth in the Central African Republic has remained anemic since 2013 owing to structural rigidities, poor infrastructure, and limited energy supply. Inflation reached 11.6 percent in 2014 and receded to 4.5 percent in 2015 thanks to improved supply conditions and a fall in the prices of basic imports. Corrective measures implemented in 2015 allowed revenue to reach 7.1 percent. IMF Executive Directors have commended the authorities for the progress achieved under their economic program supported by the Rapid Credit Facility, which has helped stabilize the economy, rebuild core administrative capacity, and improve the management of public resources.
International Monetary Fund. Middle East and Central Asia Dept.
This paper discusses Iraq’s First and Second Reviews of the Staff-Monitored Program (SMP) and Request for a Three-Year Stand-By Arrangement. The oil price decline has resulted in a massive reduction in Iraq’s budget revenue, pushing the fiscal deficit to an unsustainable level. The authorities are responding to the crisis with a mix of necessary fiscal adjustment and financing, maintaining their commitment to the exchange rate peg. The authorities started an SMP in November 2015 to establish a track record of policy credibility and pave the way to a possible IMF financing arrangement. Their performance under the SMP has been broadly satisfactory.
International Monetary Fund. Middle East and Central Asia Dept.
This paper discusses the Iraqi authorities’ request for a Staff-Monitored Program (SMP). The authorities have requested an SMP to establish a track record of policy credibility to pave the way to a possible IMF financing arrangement. Under the SMP, the authorities will implement fiscal consolidation that will contain public expenditure in line with available revenue and financing, and aim to reduce the non-oil primary deficit by US$20 billion or 12 percent of non-oil GDP between 2013 and 2016. Under the SMP, agreement has also been reached on measures to strengthen public financial management, anti-money laundering and countering the financing of terrorism, and financial sector stability.
International Monetary Fund. Middle East and Central Asia Dept.
This paper discusses Jordan’s Sixth Review Under the Stand-By Arrangement, Request for Waivers of Applicability of Performance Criteria (PC), and Rephasing of Access. PC Program performance remains broadly on course. All end-March 2015 PCs are expected to be met. Structural performance saw improvement, including the pre-approval of a credit bureau and the establishment of a new public investment framework. There is an urgent need for broad-based policy actions in the labor market to put the unemployed into jobs, increase female labor force participation, and reform public-sector compensation and hiring practices. The IMF staff supports the completion of the sixth review and the related purchase.
International Monetary Fund
A financial program that aims to ensure macroeconomic stability of Iraq was discussed. The Iraqi economy was severely affected in 2009 by the decline in oil prices. Macroeconomic stability was maintained in 2010, despite a highly uncertain domestic and external environment. Policy discussions were framed by Iraq’s medium-term prospects, especially with regard to the development of its vast hydrocarbon resources. Structural reforms under the program aim at improving public financial management.
International Monetary Fund
The authorities view the program as providing a valuable anchor for their macroeconomic policies during a period of high economic and political uncertainty, and providing access to budget financing. The discussions for this review were delayed owing to lengthening data lags resulting from the attacks on the Ministry of Finance and the Central Bank of Iraq (CBI). With the projected increase in oil production and exports in the coming years, Iraq will be able to strengthen its fiscal and external positions and speed up the rebuilding of its institutions and infrastructure.