Iraq’s economy, which shrank by about 11 per cent last year due to Covid-19 and a sharp decline in oil revenue, is poised to return to pre-pandemic levels by 2024, the International Monetary Fund said.
The slowdown in the real gross domestic product reflects a drop in non-oil activity and reduction in crude output as a result of Opec+ decisions, the fund said.
"Large fiscal and external current account deficits of 20 per cent and 16 per cent of the GDP, respectively, constrained the government's ability to mount an effective fiscal response to the crisis," the IMF said.
The IMF stressed the importance of fighting corruption in key public institutions and restructuring large state-owned banks to foster financial stability and develop the private sector.
Iraq has begun taking much-needed steps towards ensuring future economic stability.
The Central Bank of Iraq devalued the currency by about 23 per cent against the US dollar in December – a move the fund expects to help reduce external imbalances and preserve foreign exchange reserves.
The draft 2021 budget is intended to cut the fiscal deficit through various measures to raise non-oil revenue and contain the unsustainable expansion of pension bills and government wages, the IMF said.
Owing to the efforts, Iraq’s economy is expected to gradually recover and grow by 1.2 per cent and 3.9 per cent in 2021 and 2022, respectively, according to the IMF forecast. The economy grew by 4.5 per cent in 2019.
The fiscal and external current account deficits are expected to decline over the medium term while government debt is set to peak in 2023 and decline gradually after that, the fund said.
Iraq, Opec’s second-largest oil producer, relies on oil revenue to foot 90 per cent of government expenditure, including a $5 billion public sector wage bill each month.
The IMF also said political constraints before the parliamentary elections and renewed bouts of unrest could undermine the reform efforts.
Furthermore, pandemic‑related risks and oil market uncertainties could further complicate the economic situation, it said.
Why it pays to compare
A comparison of sending Dh20,000 from the UAE using two different routes at the same time - the first direct from a UAE bank to a bank in Germany, and the second from the same UAE bank via an online platform to Germany - found key differences in cost and speed. The transfers were both initiated on January 30.
Route 1: bank transfer
The UAE bank charged Dh152.25 for the Dh20,000 transfer. On top of that, their exchange rate margin added a difference of around Dh415, compared with the mid-market rate.
Total cost: Dh567.25 - around 2.9 per cent of the total amount
Total received: €4,670.30
Route 2: online platform
The UAE bank’s charge for sending Dh20,000 to a UK dirham-denominated account was Dh2.10. The exchange rate margin cost was Dh60, plus a Dh12 fee.
Total cost: Dh74.10, around 0.4 per cent of the transaction
Total received: €4,756
The UAE bank transfer was far quicker – around two to three working days, while the online platform took around four to five days, but was considerably cheaper. In the online platform transfer, the funds were also exposed to currency risk during the period it took for them to arrive.
Results
6pm: Dubai Trophy – Conditions (TB) $100,000 (Turf) 1,200m
Winner: Silent Speech, William Buick (jockey), Charlie Appleby
(trainer)
6.35pm: Jumeirah Derby Trial – Conditions (TB) $60,000 (T)
1,800m
Winner: Island Falcon, Frankie Dettori, Saeed bin Suroor
7.10pm: UAE 2000 Guineas Trial – Conditions (TB) $60,000 (Dirt)
1,400m
Winner: Rawy, Mickael Barzalona, Salem bin Ghadayer
7.45pm: Al Rashidiya – Group 2 (TB) $180,000 (T) 1,800m
Winner: Desert Fire, Hector Crouch, Saeed bin Suroor
8.20pm: Al Fahidi Fort – Group 2 (TB) $180,000 (T) 1,400m
Winner: Naval Crown, William Buick, Charlie Appleby
8.55pm: Dubawi Stakes – Group 3 (TB) $150,000 (D) 1,200m
Winner: Al Tariq, Pat Dobbs, Doug Watsons
9.30pm: Aliyah – Rated Conditions (TB) $80,000 (D) 2,000m
Winner: Dubai Icon, Patrick Cosgrave, Saeed bin Suroor
PREMIER LEAGUE FIXTURES
Tuesday (UAE kick-off times)
Leicester City v Brighton (9pm)
Tottenham Hotspur v West Ham United (11.15pm)
Wednesday
Manchester United v Sheffield United (9pm)
Newcastle United v Aston Villa (9pm)
Norwich City v Everton (9pm)
Wolves v Bournemouth (9pm)
Liverpool v Crystal Palace (11.15pm)
Thursday
Burnley v Watford (9pm)
Southampton v Arsenal (9pm)
Chelsea v Manchester City (11.15pm)
Honeymoonish
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UAE currency: the story behind the money in your pockets
ITU Abu Dhabi World Triathlon
Wonka
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Result
Crystal Palace 0 Manchester City 2
Man City: Jesus (39), David Silva (41)
UAE currency: the story behind the money in your pockets
Saudi Cup race day
Schedule in UAE time
5pm: Mohamed Yousuf Naghi Motors Cup (Turf), 5.35pm: 1351 Cup (T), 6.10pm: Longines Turf Handicap (T), 6.45pm: Obaiya Arabian Classic for Purebred Arabians (Dirt), 7.30pm: Jockey Club Handicap (D), 8.10pm: Samba Saudi Derby (D), 8.50pm: Saudia Sprint (D), 9.40pm: Saudi Cup (D)
Red flags
- Promises of high, fixed or 'guaranteed' returns.
- Unregulated structured products or complex investments often used to bypass traditional safeguards.
- Lack of clear information, vague language, no access to audited financials.
- Overseas companies targeting investors in other jurisdictions - this can make legal recovery difficult.
- Hard-selling tactics - creating urgency, offering 'exclusive' deals.
Courtesy: Carol Glynn, founder of Conscious Finance Coaching
