Al-Kazemi’s advisor: Were it not for the monetary policy stance of the Central Bank, the situation would have been very dangerous

Baghdad / Obelisk: The Prime Minister’s Adviser for Financial and Economic Affairs, Mazhar Muhammad Salih, on Saturday, July 24, 2021, identified the reasons for the decline in the country’s gross domestic product, while revealing by numbers the decline in the unemployment rate and the poverty rate.            

Saleh told Al-Masala, “The slowdown in economic activity in the year 2020 (in light of the closure of the national economy and the suspension of business for long months and the disruption of reciprocal entanglements in the labor and production markets, had the widest impact on the decline in the country’s gross domestic product, which was estimated by the economic circles affiliated with international financial institutions). Multilateralism with a rate of no less than negative 9.5% to negative 11% as an average for the year 2020.

He added that “2020 was one of the most difficult years in which the gross domestic product lost important rates of value added and there was a decline in overall economic spending, whether at the level of the general budget or individual spending, accompanied by high rates of unemployment in the labor force and zero growth in prices, which is the triple. Which I mentioned that there is an economic stagnation in the national economy in the year 2020.”

He stressed that “were it not for the monetary policy stance of the Central Bank of Iraq, which made the monetization of public debt tools as a quantitative facilitation in providing liquid monetary assets by monetizing public debt, supplementing government spending and sustaining payments to the banking system, the situation would have been very dangerous.”

He pointed out that “the Central Bank of Iraq has provided cash liquidity by accepting government debt instruments for the benefit of total spending, whose value exceeded 41 trillion Iraqi dinars,” praising the “successful role of monetary policy in moving the stagnant joints of the economy and lifting it from deterioration towards recession and preventing cases of poverty and unemployment in Iraq.” The year 2021, in order to make this year a year of truly economic recovery, especially after economic growth in GDP turned into achieving simple positive rates.

He continued: “But it is still below the annual population growth rate, which means that the improvement in GDP growth is slow, but at least there is no deterioration in GDP, as unemployment rates have declined today from the rates that prevailed in 2020, and employment has improved as unemployment has fallen.” To less than 22% currently, and it is in a relative decline after it reached more than 27% last year, and the poverty rates have also declined, after reaching nearly 35% in the year 2020, to less than 25% of the population.

He explained, “The policy of credit facilitation adopted by the Central Bank of Iraq by providing at least 4 trillion dinars for the housing sector (except for other sectoral credits) without bank interest and the adoption of long payment periods, has provided the grant element in the real estate credit policy for Iraq, as it absorbs The construction and housing sector is about 20% of the Iraqi labor force currently, and it is an important activity that has improved job market opportunities and reduced unemployment trends.”

MHe concluded by saying: “But corruption remains the added cost that the national economy pays for, which ranges between 25-40% of the cost of implementation, whether in government equipment or the contracting sector, and it is a serious dilemma that has become and is still one of the constants of economic and political reform required in Iraq, which took over the paper. White address it frankly.”

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