Stable outlook for the economy and Iraq's sovereign rating - B

8/12/2015 0:00

BAGHDAD - A follow-up to the morning

Said Fitch credit rating: the recovery of oil prices will contribute to improving public financial situation of Iraq unexpected at the same time simple deficit by 2017 year.

This comes at a time when Iraq Foundation awarded him the first sovereign credit rating for versions of which is sought by the country before his intention to issue international bonds worth five billion dollars, aims to ease the pressure drop in oil prices on the state budget.

Lenders face

Known credit rating GCR an acronym for (global credit rating) as a measure to assess the possibility of the borrower to meet its obligations in the face of lenders or in other words, the risk of non-payment of lender (the source of the bond) to fulfill its obligations (loan value and benefits) of the borrower (bond) holder. And is rated the world's credit rating ladder consists of 4 degrees is A, B, C and D as well as variables that represent signal the + or - different Petkrarat.

Economists believe that Iraq get a sovereign rating was low and that it is better than not having any degree of classification because the lack of a degree classification means that the country is one of the areas even if no investment was high-risk.
Investment grade rating

And it chose Fitch rating B_ with a stable outlook for Iraq which is less than six degrees from investment grade AAA) or A +++) attributed it to political risk and poor security, which said it is one of the most serious risks faced by any entity It has a sovereign credit rated by Fitch.

According to experts, this rating also can be reconsidered after the economic stability and security of Iraq and the financial situation as well as because it possesses the qualifications that will raise the degree Ranked advanced degrees.

Being the owner of the fifth-largest oil reserves in the world can be for Iraq to become an attractive investment for some investors. Oil contributes 40 percent of gross domestic product of Iraq and more than 90 percent of the public finances and the external current transactions revenue.

Fitch also forecast a deficit in public finances dozens of Iraq box in 2015 because of falling oil prices and increased military spending and costs associated with efforts to fight al (Daash) terrorist.

Production costs

According to Fitch Ratings said in a statement (low production costs. Most of the facilities and infrastructure for the production of oil infrastructure is far from safe areas inside).

For his part, Secretary of the Finance Committee in the Iraqi Parliament Haitham al-Jubouri said that the low rating "does not meet the ambitions" but it may be considered the starting point of financial development.

He said al-Jubouri told Reuters: »It encourages us to start taking serious steps to reform the Iraqi banking sector and send a strong message to investors and improve our own future economic and financial outlook».