Iraq: Technical Assistance Report-Guarantees and Extra Budgetary Funds Management

IMF Staff Country Reports, February 5, 2021

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Iraq: Technical Assistance Report-Guarantees and Extra Budgetary Funds Management

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Bibliographic details

• Published: February 5, 2021
• Series: IMF Staff Country Reports
• DOI: https://doi.org/10.5089/9781513568362.002

Executive summary and main findings

• Iraq is substantially exposed to fiscal risks related to guarantees issued by the State.
• Stock of guarantees related to foreign currency service payments and debt: USD 21.7 billion at end-June 2017.
• A stock of domestic guarantees remains to be fully assessed.
• In 2017, the Council of Ministers approved a set of procedures to tighten controls on the approval of State guarantees.
• Misreporting cases highlight the need to further strengthen capacities and institutional arrangements to effectively identify and monitor the fiscal implications of guarantees, including in the context of extra‑budgetary funds’ (EBFs) operations.

Analysis themes

• Fiscal risk exposure from State guarantees:
  • Quantified foreign-currency guarantees and debt: USD 21.7 billion at end-June 2017.
  • Domestic guarantees: assessment incomplete; fiscal implications not fully known.
• Institutional controls and reforms:
  • 2017 Council of Ministers procedures aimed at tightening approval controls for State guarantees.
  • Remaining gaps in capacity and institutional arrangements undermine effective monitoring and reporting.
• Reporting and monitoring deficiencies:
  • Documented misreporting cases indicate weaknesses in current systems.
  • Need for better integration of guarantees monitoring with EBFs’ operations to capture contingent liabilities.

Policy recommendations (implied by assessment)

• Strengthen capacities to identify and monitor fiscal implications of guarantees.
• Improve institutional arrangements to ensure accurate reporting and oversight of both foreign currency and domestic guarantees.
• Enhance monitoring of extra‑budgetary funds’ operations to capture contingent liabilities arising from EBF-related guarantees.

Content in this bundle

• Preface — Executive Summary and Selected Sections on Guarantees Management
  • Preface — Executive Summary and Selected Sections on Guarantees Management (Markdown version)
  • Preface — Executive Summary and Selected Sections on Guarantees Management (PDF)