Iraq Economic News and Points To Ponder Monday Afternoon 5-11-26
The Ministry Of Commerce Announces The Launch Of New Electronic Services And The Digital Linking Of Warehouses And Agents In Seven Governorates.
Money and Business Economy News – Baghdad The Ministry of Trade announced on Monday the launch of additional services as part of the electronic transformation in seven governorates, while revealing a plan to link warehouses and agents electronically.
Riyadh Al-Moussawi, Director General of the Commercial and Financial Control Department at the Ministry, said that "more than seven governorates have witnessed the launch of additional services within the electronic transformation, and work is continuing to expand these services."
He explained that "the ministry is serious about implementing digital transformation plans and moving away from paper transactions, including the ration card and the mechanisms for serving citizens benefiting from it," indicating that "citizens will be able to complete transfer, splitting, deletion and other transactions via mobile phone."
He added that "there are plans to develop the program adopted in the Planning and Follow-up Department, which will allow us to know which citizens have received the food basket items from the agents, and which have not, as well as knowing the number of rations that have reached each agent."
He added that "the ministry is working on linking warehouses and agents electronically, while preparing a geographical map of the agents' network to know their locations accurately," noting "the trend towards equipping shops with surveillance cameras, in conjunction with the adoption of electronic payment devices." https://www.economy-news.net/content.php?id=68952
Al-Sudani's Advisor: Iraq's Revenues Are 4 Trillion Dinars And Expenditures Exceed 8 Trillion Dinars Monthly.
Money and Business Economy News – Baghdad Muzhir Muhammad Salih, advisor to Prime Minister Muhammad Shia al-Sudani, announced that Iraq’s revenues amount to about 4 trillion dinars due to the decline in oil exports, while its expenditures amount to 8 trillion dinars. To address this situation, Iraq has two options: internal and external borrowing.
Saleh said that Iraq’s public finances are going through a “sensitive phase” due to the significant drop in oil revenues, which has led to a decrease in monthly revenues to approximately 4 trillion dinars, compared to the country’s financial obligations of more than 8 trillion dinars per month.
The eight trillion includes salaries and basic operating expenses.
Muzhir Muhammad Salih pointed out that this situation creates a temporary liquidity crisis rather than a deficit that threatens the continuity of the state's ability, but the continuation of this gap for a long period will create more pressure on economic and monetary stability in Iraq.
Iraq’s oil revenues, which account for more than 84% of Iraq’s expenditures, have fallen to about 2.5 trillion dinars, which can only cover 34% of salary funds.
According to the Prime Minister's advisor, fiscal policy will follow two paths to deal with the crisis, the most important of which is the continuity of public spending, or it will follow both paths together.
The first path: Increase local financing activity through domestic borrowing and short-term loans in coordination with the central bank, which provides liquidity quickly to enable the state to meet its financial obligations. However, failure to implement this path positively will lead to increased inflationary pressures and affect the value of the dinar against the dollar.
The second path: resorting to external financing through international financial institutions, issuing bonds and borrowing from abroad, which supports the foreign reserves of the central bank, gives confidence in the financial stability of Iraq and stabilizes the value of the dinar against the dollar, but this step also has conditions and financial obligations.
The war between Iran, America and Israel led to the closure of the Strait of Hormuz since February 28, which was the main route for Iraqi oil exports, and despite the ceasefire now, there are still problems with the movement of oil tankers in the strait.
Muzhir Muhammad Salih noted that Iraq’s foreign reserves are currently less than $100 billion, which covers 12 months of imports, while the international standard for the trade capacity of foreign reserves is three months.
https://www.economy-news.net/content.php?id=68939
Parliamentary Finance Committee: Oil Revenues Cover Only A Third Of Salaries
Money and Business Economy News – Baghdad Iraqi oil revenues cover only about a third of salaries, and according to a member of the Finance Committee, Baghdad needs to borrow between four and five trillion dinars per month.
According to official statistics from the Iraqi Oil Marketing Company (SOMO), oil exports in March amounted to 18.6 million barrels.
Oil revenues for that month amounted to $1,157,121,000, equivalent to 2.5 trillion dinars at the official exchange rate of the dinar against the dollar.
The decline in Iraqi oil revenues comes at a time when the federal government needs 7.2 trillion dinars per month to secure the salaries of employees, retirees, and those covered by social welfare, including the salaries of the Kurdistan Region.
A report by the Federal Ministry of Finance on expenditures and revenues for January and February revealed that more than 84% of Iraq's expenditures depend on oil. Consequently, oil revenues cover only 34.7% of the total salaries for that month.
Borrowing approximately 4-5 trillion per month
Jamal Kojar, a member of the Finance Committee in the Iraqi Parliament, explained that "the federal government has to borrow between four and five trillion dinars per month, according to current oil revenues."
Reports from the Iraqi Ministry of Finance also showed that its debts amounted to 10.5 trillion dinars in the first three months of this year.
To address this shortfall in revenue and expenditure funds, the current caretaker government does not have a free hand to deal with it.
Jamal Kojer explained that there are several ways for the government to address this deficit, which are borrowing from government banks such as Al-Rafidain, Al-Rasheed and the Trade Bank of Iraq (TBI), where interest rates are low compared to private banks, or resorting to withdrawing the currency reserve at the Central Bank.
The Parliamentary Finance Committee Calls For The Disbursement Of Employee Salaries For The Month Of May Before Eid Al-Adha.
Money and Business Economy News – Baghdad The parliamentary finance committee confirmed that the government is able to secure the necessary liquidity to pay salaries, calling for the payment of employee salaries for the current month of May before the Eid al-Adha holiday.
Jamal Kojar, a member of the Finance Committee, told the official newspaper, as reported by “Al-Eqtisad News,” that “the salaries are secured and there is no dispute about them, and the government can distribute this month’s salaries before Eid, and there is no obstacle,” explaining that “the distribution process usually begins on the 18th of the month, and is supposed to be completed by the 25th.”
He added that “this month has a special status because of Eid al-Adha, which necessitates bringing forward the date of salary payments before the holiday, and there is a real possibility of achieving that.”
Regarding the financial situation, Koger explained that “the new government, if formed, will have three options for managing the current fiscal year. The first is to operate on a 1/12 system, which means difficulty in implementing the government program. The second option is to prepare a semi-annual budget, or to adopt a ready-made budget from the previous government if one exists, or to prepare a new budget in record time and send it to Parliament.”
He pointed out that “the third option is to enact a law similar to the food security law,” noting that “this option is the closest to being implemented given the limited time and the approaching end of the first half of the year.”
Kujer stressed that “a comprehensive budget is one that fully reflects the government program,” explaining that “resorting to temporary solutions may allow for the implementation of only parts of the program, and not its comprehensive implementation.”