IMF Staff Concludes Virtual Visit to Iraq

IMF News, December 3, 2021

Source details

Staff team led by Tokhir Mirzoev held a virtual mission with the Iraqi authorities during November 28 - December 2.
End-of-Mission press releases convey preliminary findings and the views are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board.
Press Release No. 21/357.

The economy is recovering from last year’s sharp contraction, helped by higher oil prices and easing of the containment measures.
Real non-oil GDP is expected to rebound by 12 percent in 2021.
Oil output is projected to gradually increase in line with the OPEC+ agreements.
Inflation has reached 7.2 percent in September.
The fiscal and external current account balances are expected to improve significantly in 2021 from double-digit deficits in 2020, mainly due to higher oil prices.
Recent weeks saw a significant decline in new COVID-19 infections and a gradual improvement in the vaccination rate.

Recovery is expected to continue in the medium term.
Considerable downside risks remain, most notably related to the oil market volatility and the COVID-19 pandemic.

Strengthen public finances while creating fiscal space for investment and social safety nets.
Civil service reform aimed at increasing public sector efficiency and containing the wage bill.
Reduce inefficient energy subsidies.
Diversify fiscal revenues.
Stem losses in the electricity sector.
Strengthen governance.
Improve the coverage and targeting of social assistance to better protect the most vulnerable.
Restructure large state-owned banks and strengthen their governance to revitalize the financial sector and ensure private sector access to finance.

Higher oil revenues present an opportunity to tackle Iraq’s significant underlying vulnerabilities, strengthen resilience, and advance key socio-economic priorities.
The IMF stands ready to support Iraq toward these ends.
The IMF staff team thanked the authorities for candid and productive discussions during the mission.

IMF Communications Department — Press Release No. 21/357, December 3, 2021