Iraq cuts spending billions of dollars in loans and 2016

2016-07-14 at 18:44

Baghdad scales news

The Iraqi Government said in a memorandum published IMF that Iraq will cut spending in non-oil balance 15% by 2016 and will owe billions of dollars in oil prices fall more than expected.

Iraq adopts the second largest oil producer in OPEC crude exports to reap all revenues.

While Iraq sought to obtain support from donors amid the collapse of global crude oil prices and the high cost of the war to organize "Islamic State".

The Iraqi Parliament agreed to balance the 2016 valued at 105.8 trillion Iraqi dinars (about 90 billion us dollars) with a deficit of 24 trillion dinars in December.

The Government stated in a letter addressed to the International Monetary Fund to request a loan under request it now expects to reduce the deficit to 4.9 billion in 2016 and then to 13.2 billion dollars during the period 2017-2019.

The IMF approved the loan on demand last week to allow Iraq to get down payment worth 1.9 billion dollars.

While Iraq said that other sources of funding to meet this year's deficit would include $ 2 billion worth of loans from the World Bank involved in France, Britain and Canada guaranteed loans worth more than $ 3 billion from the United States and other lenders.

Authorities would rely on $ 1 billion worth of bonds to ensure full and American international bond issue by the same amount in the last quarter of 2016.

The last time I sold Iraq international debt instruments which were in 2006 when bonds issued around 2.7 billion dollars due in 2028 and coupon 5.8%.

The Iraqi Government plans to draw foreign exchange reserves during the next few years to help support this Fund.

The Government expected that declining reserves to 31.5 billion dollars in 2020 from 59 billion dollars in October.

Iraq also said the IMF was committed to "pay out" for outstanding dues to international oil companies by the end of 2016.

While the Government said in the memo that it will apply the freeze on recruitment policy in most sectors and pension reform in electricity charges to raise revenue.

With the Government added that Iraq's economic activity contracted by 2.4% in 2015 but expects to grow by 10.3% in the current year.