By John Lee.

Finance Minister Hoshyar Zebari (pictured) said on Wednesday that Iraq has decided to issue $5 billion in international bonds, as it attempts to finance a budget deficit of $25 billion for the current year.

He told reporters in Washington that negotiations were in progress with Citibank and Deutsche Bank, but according to Reuters declined to say what maturity and interest rates were being considered.

He also confirmed that Iraq has also asked the International Monetary Fund (IMF) for relief funding of between $400 million and $700 million.

The government has also managed to borrow $7 billion from semi-state-owned Iraqi banks to cover its shortfall, Zebari said.

(Sources: Reuters, BasNews)

By John Lee.

Iraqi Finance Minister Hoshiyar Zebari has confirmed that Iraq is discussing its financial situation with theInternational Monetary Fund (IMF).

Speaking on the sidelines of a conference in Kuwait on Tuesday, Zebari did not elaborate on what aid might be provided, but according to the report from Reuters he has previously said Iraq plans to raise $1.8 billion this year by using Iraq’s Special Drawing Rights at the IMF, which would be different than an emergency loan programme.

He said “Iraq is not bankrupt – we have plenty of assets we can use … [But] we have a serious cash flow problem,” adding that Iraq’s financial squeeze was “very serious“.

(Source: Reuters)

By John Lee.

The Deputy Minister for gas refineries at the Ministry of Oil, Fayaz Hassan, has told reporters that Iraq owes almost $20 billion (24 trillion Iraqi dinars) to foreign oil companies working in the country.

BasNews quotes him as saying that the Iraqi Oil Ministry has met with the Finance Ministry and Central Bank to raise a $12 billion cheque, and “within a month pass it to the foreign oil companies.”

(Source: BasNews)

By John Lee.

Basra governorate has reportedly approved 60 new power projects valued at a total of $218 million (255 billion Iraqi dinars) within its 2015 budget.

The projects were given the green light at an emergency meeting of the governing council  on Monday, and were fewer than desired because of budget constraints.

Emirates 24|7 quotes a Basra official as saying that the governorate, Iraq’s wealthiest province, approved a budget of about 4.3 trillion dinars (3.6 billion dollars) for 2015, but was allocated only 1.3 trillion dinars (1.11 billion dollars) by Baghdad due to lower oil prices and soaring military spending.

(Source: Emirates 24|7)

(Electricity image via Shutterstock)

By John Lee.

Turkey has agreed to provide a $500-million [600 billion Iraqi dinar] loan to the Kurdistan Regional Government (KRG) to help pay the wages of state officials.

According to a report from Daily Sabah, the loan will be repaid by either being set off from Turkey’s crude oil debts or being repaid directly by the KRG.

KRG Minister of Finance and Economy Rebaz Muhammed Hamlan (pictured) said that the loan had reached Erbil, but added that it is not suffient to cover the wages of public workers and state officials; the government will have to export more crude oil to obtain the cash it needs.

(Source: Daily Sabah)

The Kurdistan Region of Iraq Needs an Estimated US$1.4 billion this Year to Stabilize the Economy

The Kurdistan Regional Government (KRG) is facing an economic and humanitarian crisis as a result of the influx of Syrian refugees (starting in early 2012) and more recently the Internally Displaced Persons (IDP) in 2014.

According to a newly completed KRG – World Bank report, economic growth contracted 5 percentage points in the Kurdistan Region of Iraq (KRI), and poverty rate more than double increasing from 3.5 percent to 8.1 percent.

The report, Economic and Social Impact Assessment of the Syrian Conflict and ISIS Crisis, provides national and regional policy makers with a technical assessment of the impact and stabilization costs needed for 2015, associated with the influx of refugees and IDPs.

The stabilization cost for 2015 is estimated at US$1.4 billion [1.6 trillion Iraqi dinars] in additional spending above and beyond the KRG budget. This estimate could get much higher depending on how long the crisis persists. While the KRG has been responsive to addressing the needs of the displaced population up till now, more resources are needed to avert this humanitarian crisis and address the needs of the displaced population in the medium and long-term.

Impact refers to the immediate economic and fiscal effects on the KRG economy and budget, while stabilization cost refers to the additional spending that would be needed to restore the welfare of residents of the KRI.

“The international community remains deeply concerned by the circumstances facing the refugees and Internally Displaced Persons in the Kurdistan Region of Iraq,” said Robert Bou Jaoude, World Bank Special Representative for Iraq. “We hope that this assessment will support the KRG’s dialogue with its national and international counterparts and that a swift resolution to this problem will be identified.”

The study highlights how prices and unemployment have increased, and refugees and IDPs entering the labor market are pushing wages down. A surge in violence led to supply side shocks. The ISIS crisis has had a significant effect on trade of goods and services.

By John Lee.

Kuwait will host the 23rd soccer Gulf Cup in early 2016, after Iraq declined to host the tournament due to a deficit in the State budget.

According to Arab News, Iraq will instead bid to host the 24th edition of the Cup.

Iraq had been due to host the event in Basra.

(Source: Arab News)

(Football image via Shutterstock)

By John Lee.

Iraq’s parliament approved the country’s 2015 budget on Thursday, based on a crude oil price of $56 a barrel.

According to a report from the Wall Street Journal, the budget projects a deficit of $20 billion, compared with $40 billion in an earlier version.

Iraq didn’t pass a budget for 2014.

The budget (Arabic) can be downloaded here.

(Source: WSJ)