... to give ourt readers, investors & friends a sense of the change that #Iraq has gone through over the last 18 monthss –– a significant social & economic transformation, brought on by the combination of the improved security & an expansionary budget ...
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... by a government flush with the bounty bequeathed by higher oil prices.
The focus, is on transformation that #Baghdad, “ست البلاد”, has gone through, from the return of the social & economic life, the increased signs of construction activity in the city, ...
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... the vibrant entrepreneurial space operating in #Baghdad & elsewhere in Iraq, a visit to the wonderous Iraqi museum, my old school-Madame Adel School in Al Al-Sa'adoon Park, before ending at the city’s literary heart-Al-Mutanabbi Street.
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As a native of #Baghdad, despite having spent the bulk of my life living in so many beautiful cities all over the world, can only marvel at how she maintained her grace, charm & much of her beauty in-spite of the calamities that have befallen her.
This, however, hasn’t translated, at least not yet, to higher demands for imports to satisfy consumption - given the high dependence on imports – as seen from the CBI’s USD sales volume as of 30/11 (using demand for USD as a proxy for import demand) ... more data is needed.
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But private sector deposit & loan growth in #Iraq, in effect by 2018, has continued to grow in 2020 up to July (latest data), helped by the CBI’s accommodating monetary policies to counter the effects of the pandemic
"Up #debt creek without a paddle" #Iraq's budget’s structural imbalance between current & investment expenditures, as ever-increasing current expenditures will overtake revenues, needs debt to fund this gap.
Data in chart: 2010-2024 IMF estimates & projections.
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#Iraq has been fortunate that higher oil prices & exports led to a budget surplus of over $27.5bn by end of Jul 2019. Revenue-expenditure gap is pushed forward in time. But, it is only a matter of when, not if, expenditures will overtake revenues.
This structural imbalance needs time be addressed, in the meantime there will be an urgent need to finance both.
The social contract, re-public employment, cannot be broken without creating the conditions for private sector growth to absorb an ever-growing labour force.
I argued, following the 2018 elections & based on the works ....
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... of Falah Jaber’s “The Iraqi Protest Movement: Frm Identity Politics to Issue Politics,” & Faris Kamal Nadhmi’s “Historical Bloc” thesis: that the 2015 protest movement which resulted in the break-up of the ethno-sectarian monolithic blocs dominant over the past 15 years,
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will continue to influence the political landscape for an extended period leading to meaningful change.
Demographic trends support this: Jaber’s survey notes the under 30’s age group accounted for 60% of the protest movement.
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My review on the #Iraq Stock Exchange for July: The IMF revised its real GDP, non-oil GDP growth rates for the crisis yeas 2014-2017 & post conflict 2018-2021.
The crisis years were, on the whole, weaker than initially expected.
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While, 2018, the 1st year following the conflict, was the 2nd year of a deep recession with a contraction of -0.6% on the back of the prior year’s -2.5% decline, instead of being a 1st year of an economic recovery, at +2.9%, following a shallower decline of -0.4%.
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On the other hand, the expected recovery in 2019/2020 would be much stronger than est.’d earlier with GDP growing at +4.6%/+5.3% instead of +1.7%/+2.0%.
For non-oil GDP, the sharp decline of 2015 was much steeper at −14.4% than earlier est.’s of −9.6%, while ...
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Recap: In the “Dialogue of the deaf” or “The debate over #Iraq-i #Kurdistan’s share of the federal budget”, I argue that the budget sharing ...
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... agreement, like all prior ones, is flawed, unsustainable, & bound to fail.
Looking at the #KRG’s finances, with the help of the Deloitte audits, I argue that the KRG cannot, even if it wanted, to comply with its obligations under the #Iraqi federal budget terms.
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The GoI & the #KRG need to embark on comprehensive re-write of the relationship in a such way that both parties believe that the benefits of the new relationship far outweigh the benefits of not having it.
which, based on current spending patterns & reported oil revenues, could grow to about $4.2bn by the end of June. Helped by the healing effects of increasing oil revenues, this surplus is on top of surpluses of $1.6bn for 2017 & $21.6bn for 2018 (chart)
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Current spending patterns, making up the bulk of the 2019 budget spending at about 75% of the total, are steady & consistent with an expansionary budget in which this spending is up +15% over 2018.
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