Policies required to achieve financial sustainability in Iraq and reduce the effects of public debt | ||
| مجلة جامعة الانبار للعلوم الاقتصادیة والاداریة | ||
| Article 1, Volume 11, Issue 27, November 2019, Pages 1-15 PDF (568.33 K) | ||
| Author | ||
| Ahmed Omer AlRawi . | ||
| . | ||
| Abstract | ||
| The circumstances that Iraq experienced after the year 2014 have resulted in difficult positions in managing its financial situation, as a result of the decline in oil prices to low levels compared to before that year with the increase in public spending as a result of the war on terrorism and its implications for the economic and social situation. This led to an imbalance between what revenues and public expenditures were, which negatively affected the preparation of annual budgets, which have become a financial deficit of about 20% of the budget size. Which led to resorting to international sources to finance that deficit, and the country entered into negotiations with several parties, particularly the International Monetary Fund and the World Bank to obtain loans.This debt is expected to increase to about 137.1 billion by 2021, exceeding 60% of GDP. And that about 78 billion of this debt to external parties and the rest represents an internal debt. To fill the deficit, especially the 2015/16 deficit, the state resorted to withdrawing from the central financial reserve to pay off part of its fiscal deficit, which led to the decline of financial reserves from about 78 billion dollars in 2013 to about 46 billion dollars in 2017, According to the expectations of the International Monetary Fund, the reserve will decline to reach about $ 36 billion in 2022, and the continued borrowing to finance the annual deficit if public spending continues to exceed the revenues achieved, and the inability to achieve financial sustainability due to limited non-oil revenues from the volume of spending, which will put Iraq in a downward spiral Repeated financial crises and flooding Iraq with the public debt crisis, especially the external debt, unless serious strategy is taken that includes measures to reduce public expenditures and enhance non-oil revenues, and that it be adopted in preparing budgets to achieve financial sustainability. | ||
| Keywords | ||
| public debt; economic policies; Financial Sustainability | ||
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