Fitch reduces economy rating of Iraq
(Fitch) , amend the Iraqi economy rating from "stable to negative" and expects his recovery in 2017

03/03/2016 20:34

Long-Presse / Baghdad
Announced an international institution credit rating on Thursday, modify classification of the Iraqi economy from "stable to negative", while attributed to the decline in oil prices and poor political and security situation and tensions "ethnic and sectarian," predicted improvement in the situation in Iraq more during 2017.

Fitch said the International Foundation for credit rating, in its report, which announced today, and I followed (range Press), "The classification of the Iraqi economy rate was amended from stable to negative, to one degree (B-) of the deterioration of oil prices, increasing the deficit in the gross domestic product GDP from 8.2 percent in the 2015 last year, to 15 percent during the current year 2016, in line with expectations, "likely the possibility of improving the Iraqi economy more during the next year, in 2017 the deficit rate to fall to 7.6 percent of the total gross domestic product."

She said the organization, that "the rating was based on key indicators including the decline in oil prices, which led to the deterioration of the financial situation of Iraq, which relies more than 90 percent of its economy on oil imports, which constitutes 50 percent of GDP," indicating that "the inability of the Iraqi economy As a result increased to 8.2 percent during the 2016 year. "

She explained Fitch, the "predicted the survival of the price of Brent crude rates during the current 2016, at $ 35 a barrel, would increase the deficit rate of growth of the Iraqi economy, to 15 percent during the current year compared to the past 2015," pointing out that "other indicators that have been adopted in classified, it relates to poor political and security situation. "

According to the institution, that "Iraq is some progress against Daash, but the threat of regulation is expected to continue during the current year 2016 at least," he continued that "ethnic and sectarian tensions are also led to political instability in Iraq."

Predicted Fitch, too "weak growth of investment in Iraq during the current 2016 because of lower oil prices, with the government's inability to repay the amounts spent by international companies in their projects within the country," the follow-up to the "indicators that are expected to lead to improved economic situation more during the next year in 2017, is the possibility of the high price of crude Brent from $ 35 a barrel during the current 2016, to $ 45, predicted the survival of export rates at three million and 300 thousand barrels per day, for the years 2016-2017, as well as the recovery of non-oil sectors, which will coincide with the expected improvement in the security situation. "

The Fitch international institution credit rating, Fitch Ratings, is a wholly owned subsidiary of Hearst Corporation, one of the three rating majors along with Standard & Poor's and Moody's, the company was founded by John Knowles Fitch, in (24 December 1913), in New York city as the Fitch Publishing company, and merged with IBCA Limited, based in London in December 1997.

The credit rating agencies are private companies independent, evaluates the creditworthiness of bond issuers from countries or companies, that is the extent of the company's ability or the state to repay the debt or the ability to invest in, and reflected the classification issued by positively or negatively, on investors' confidence in the state or the company involved.

And based credit rating institutions on several criteria based on the economy, legislation and impacts of geopolitical and corporate governance, corporate governance and competitiveness in its credit rating institutions / countries, Kalrlakeh, assets and financial flows that show in the end the current financial situation resulting in the expected outlook for the institution or the state.

And return control of those three companies, the decision by the US Securities Commission in 1975 as accredited by them companies, as many of the financial institutions and insurance companies do not invest only in high-rated bonds, the easiest way by exporters bonds to prove their creditworthiness is to obtain credit from a company or two of these three companies classified into these three companies monopolized institutions like credit rating around the world.

The use of rating agencies symbols to describe the creditworthiness start from AAA as the highest credit rating (mean safer), down the rankings least deserved through letters AA, A and BBB, and so on, right down to D (mean stuttering), while the mean halving (B-), which granted Iraq (risk).