April 2011Economic growth in Iraq at 12% in 2011
The International Monetary Fund projected Iraq’s real GDP growth at 12.2% in 2011 compared to an estimate of 1% in 2010, and forecast non-oil growth at 5% this year relative to 4.5% last year.
It said authorities have been successful at maintaining macroeconomic stability under difficult circumstances, adding that such stability is one of the key conditions for the development of a vibrant economy.
It called for efforts to rebuild key economic institutions, including those needed for private sector development, and to improve governance. It added that Iraq’s prospects are positive, but risks remain from political instability and a deteriorating security situation, to delays in the development of oil fields and volatility in oil prices.
The Fund supported the Central Bank of Iraq’s policy of managing the exchange rate of the Iraqi dinar to keep inflation low. It said a stable exchange rate continues to provide a solid anchor for the public’s expectations in an otherwise highly uncertain environment.
But it noted that rising oil revenues could put upward pressure on the real exchange rate, which would warrant greater exchange rate flexibility.
The International Monetary Fund projected Iraq’s real GDP growth at 12.2% in 2011 compared to an estimate of 1% in 2010, and forecast non-oil growth at 5% this year relative to 4.5% last year.
It said authorities have been successful at maintaining macroeconomic stability under difficult circumstances, adding that such stability is one of the key conditions for the development of a vibrant economy.
It called for efforts to rebuild key economic institutions, including those needed for private sector development, and to improve governance. It added that Iraq’s prospects are positive, but risks remain from political instability and a deteriorating security situation, to delays in the development of oil fields and volatility in oil prices.
The Fund supported the Central Bank of Iraq’s policy of managing the exchange rate of the Iraqi dinar to keep inflation low. It said a stable exchange rate continues to provide a solid anchor for the public’s expectations in an otherwise highly uncertain environment.
But it noted that rising oil revenues could put upward pressure on the real exchange rate, which would warrant greater exchange rate flexibility.
The IMF considered that the 2011 budget balances the need to accelerate Iraq’s reconstruction with the need to return to a sustainable fiscal position in the coming years.
It forecast the fiscal balance to post a deficit of 13.7% of GDP in 2011 compared to 10.6% of GDP in 2010.
It said the 2011 budget deficit can be financed. It added that the budget will gradually shift back to a surplus in the coming years with the projected increase in oil production, especially if oil prices remain around current levels.
It also encouraged the authorities to start work on creating a sound institutional framework for managing Iraq’s sovereign wealth in the longer run.
http://www.ifpiraq.com/news.php?id=8495
http://www.ifpiraq.com/news.php?id=8495
___June 2011_
Restructuring of state-owned Iraqi banks to be completed in June 2011
The Central Bank of Iraq (CBI) and the Ministry of Finance indicated that the restructuring of the balance sheets of the two largest state-owned banks, Rafidain Bank and Rasheed Bank, will be completed at the end of June 2011.
The restructuring plan is being implemented by a Bank Reconciliation Unit (BRU), chaired by the CBI, with the participation at a technical level of staff from the CBI, the Ministry of Finance and other stakeholders.
The BRU’s objectives are to deal with the legacy assets and liabilities of the previous regime to identify and propose to write-off non-performing loans to defunct state-owned enterprises to propose a course of action for other remaining un-reconciled accounts and to revalue the remaining foreign currency denominated balance sheet items.
In parallel, the Finance Ministry said it will continue to modernize the two banks by moving ahead with the plans for their operational restructuring, so they can operate on a fully commercial basis and on market terms, and the government will refrain from directing any lending.
It added that the decision to recapitalize Rafidain and Rasheed will not be made until the restructuring of their balance sheets has been completed and adequate progress has been made in their operational restructuring, especially by establishing an appropriate governance structure and strengthening risk management and control tasks.
http://projectsmiddleeast.com/read.asp?id=8479&CategID=37
Restructuring of state-owned Iraqi banks to be completed in June 2011
The Central Bank of Iraq (CBI) and the Ministry of Finance indicated that the restructuring of the balance sheets of the two largest state-owned banks, Rafidain Bank and Rasheed Bank, will be completed at the end of June 2011.
The restructuring plan is being implemented by a Bank Reconciliation Unit (BRU), chaired by the CBI, with the participation at a technical level of staff from the CBI, the Ministry of Finance and other stakeholders.
The BRU’s objectives are to deal with the legacy assets and liabilities of the previous regime to identify and propose to write-off non-performing loans to defunct state-owned enterprises to propose a course of action for other remaining un-reconciled accounts and to revalue the remaining foreign currency denominated balance sheet items.
In parallel, the Finance Ministry said it will continue to modernize the two banks by moving ahead with the plans for their operational restructuring, so they can operate on a fully commercial basis and on market terms, and the government will refrain from directing any lending.
It added that the decision to recapitalize Rafidain and Rasheed will not be made until the restructuring of their balance sheets has been completed and adequate progress has been made in their operational restructuring, especially by establishing an appropriate governance structure and strengthening risk management and control tasks.
http://projectsmiddleeast.com/read.asp?id=8479&CategID=37
