BAGHDAD – The Iraqi government has told the International Monetary Fund (IMF) that it can not comply with some of the criteria for its credit-standing agreement with the International Monetary Fund (IMF) in 2015 because of increased spending.
“The Iraqi economy is still suffering in the wake of attacks by the oil industry and the shock of oil prices that hit the economy in mid-2014,” said a letter sent by Undersecretary of Finance Maher Hammad and central bank governor Ali al-Alak to the IMF. To counter this double shock, the government has taken bold but necessary steps towards putting its public resources on a sustainable path and welcomed the support of the international community, which secured a credit worth of SDR 3,831 billion (about US $ 5.3 billion) for three Years we have held with the International Monetary Fund as well as significant support from donors. “
“The economic and financial policy note shows that none of the performance criteria for the end of December 2016 and one of the continuing performance criteria could be met, and one of the performance criteria for the end of June 2017 was probably not met. “The government was unable to meet these performance standards because of the spending pressures of the war against Daqash and the resulting humanitarian crisis at a time of sharp drop in oil prices, so we were forced to increase spending in 2016 and pay less external arrears than the program.”
“The non-compliance with the continuous performance standard resulted from the accumulation of external arrears of US $ 2.5 million for approximately two months at the beginning of 2017 and arrears of US $ 157 million for several days at the beginning of July 2017. All of these arrears have been repaid.”
“In the light of the temporary nature of these arrears and the steps referred to in the Economic and Financial Policy Note aimed at continuing the planned implementation of the program and improving cash management mechanisms, the Government requests exemption from non-compliance with the Continuous Performance Standard and one of the performance criteria Scheduled for the end of June 2017. We also request exemption from the requirement that the four performance criteria established for the end of June 2017, for which no information is yet available, will apply. “