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Wed. PM KTFA News Articles 10-19-22

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Samson » October 19th, 2022

Planning : The new government will prepare next year’s budget after its formation

19th October, 2022

The Ministry of Planning confirmed that the next government will prepare the Federal General Budget Law 2023 and send it to the House of Representatives in preparation for its approval, after its formation.

The Minister of Planning, Khaled Battal, stated, in a statement to the National Iraqi News Agency ( NINA ), that “the current government, the outgoing one, is the conduct of daily business, and it cannot present a budget, nor can it propose a budget at all, until the formation of the new cabinet.”

He added, “The next government will legislate or propose a general budget law and send it to the House of Representatives later to proceed with its approval during the coming period,” noting that “the current government is a caretaker that does not have the authority to send the budget law to the House of Representatives or any other party.”  LINK

A new currency will be introduced soon … What is the economic feasibility of it ?

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19th October, 2022

Iraq intends to introduce a new currency on the market soon, in a move described as “a patchwork”, especially with the increase in popular demands to reconsider the Central Bank’s decision to raise the value of the dollar compared to the Iraqi dinar, which caused an increase in the prices of all materials consumed in the country.

The currency to be introduced by the Central Bank comes with the aim of relieving pressure on the circulation of local currencies in the markets

On the sidelines of the Al-Rafidain Forum, which was held late last month in Baghdad, the Governor of the Central Bank of Iraq, Mustafa Ghaleb Mukhif, revealed an intention to present a banknote of 20 thousand dinars, while confirming that the bank has a project on raising zeros from the currency, but it needs to issue a law, especially since Deleting zeros affects the trade balance. 

What is the benefit of the new currency?

In conjunction with the efforts of the Central Bank and other sectors to reduce inflation in the local markets in Iraq, the World Bank said that the annual inflation of food in Iraq reached 6.4% between May and August of 2022.

Meanwhile, economic expert Salama Sumaisem believes, during her talk to “Ultra Iraq”, that “the currency to be offered by the Central Bank came with the aim of reducing pressure on the circulation of local currencies in the markets.”

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The economic expert added that “the introduction of such a currency also serves to reduce the inflationary pressure that is trying to consume small groups of currency in the markets, as well as being a step to fill the shortage of existing currencies in Iraq.”

According to previous economic studies, the annual inflation level rose for the month of July of this year, reaching in 2022 to 117.8, which is the highest inflation rate recorded in Iraq in more than 10 years.

Regarding the inflation that hit the markets, Sumaisem points out that “the best way to eliminate inflation lies in reducing the currencies circulating in the markets, because the more money increases in the market, the less its material value, in addition to improving banking performance by increasing reliance on sukuk and other securities.”

No economic benefits

Economist Amer Al-Jawahiri says that “issuing the 20,000 dinars currency has no economic feasibility in terms of solving the inflation file in the markets, since this currency will fill the shortage of currencies circulating in the markets.”

In an interview with “Ultra Iraq”, Al-Jawahiri continues, saying that “the Iraqi economy is a meager one, and it depends mainly on imports, and therefore it is not possible to control inflation in the markets by offering this category of local currencies.”

The weakness of domestic production with the increase in global inflation, all of which helped to increase the economic crisis in Iraq, and the words of Al-Jawahiri, who stressed that “supporting the industrial, agricultural and other sectors to meet the need for import is the only and optimal thing to reduce economic inflation in Iraq.”

At the end of his speech, Al-Jawahiri said, “The interest in the private sector and the implementation of stalled economic projects is the best way to solve the inflation crisis in the markets, because offering this currency does not help in resolving this file.”

Meanwhile, there were conflicting opinions in the Iraqi street, especially among economic circles, regarding the feasibility of issuing this cash category, amid a statement issued by the Parliamentary Finance Committee, which confirmed that they would discuss with the Governor of the Central Bank the feasibility and motives behind the decision to offer a category of 20 thousand dinars.

Gateway to new categories

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Mustafa Hantoush, a researcher in economics, says, for his part, that “the currency is considered one of the middle classes, and therefore it does not indicate the inflation of money in the markets,” noting that “the issuance of such currencies indicates the existence of a balance and parity of prices in the local markets.”

According to Hantoush’s talk to “Ultra Iraq”, the issuance of such categories opens the door to the issuance of other categories of currency, such as (15,000 Iraqi dinars), stressing that “the existence of this (new) category may fall within the marketing and contractual reasons.”

The economic expert also indicates that this is a pricing category and does not have any harm to the economy of Iraq, explaining that “this step is within the Central Bank’s steps to destroy the damaged currencies and issue new currencies.”

Iraq owns 7 categories of cash circulating in the markets, which are: 

250 dinars is roughly equivalent to 17 cents. 

500 dinars is roughly equivalent to 34 cents. 

1000 dinars is roughly equivalent to 68 cents. 

5000 dinars is equivalent to 3.5 dollars.

10,000 dinars is roughly $7.

 25,000 dinars is roughly equivalent to 17 dollars.

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50,000 dinars is roughly equivalent to 33 dollars.

The Central Bank of Iraq reduced the value of the dinar against the US dollar in 2020, in a measure that caused great anger among the Iraqi street as a result of the high prices in the markets and the low value of financial salaries in the country.

According to the official pricing of the Central Bank, the exchange rate amounted to 1,450 dinars to the dollar, instead of the previous rate of 1,190 dinars.  LINK

Iraq is ranked second in the list of the most developed countries in 2022

19th October, 2022

Arab countries are among the top 10 countries that will record high GDP growth rates for the current year, according to the International Monetary Fund’s classifications issued in the October World Economic Outlook report

This comes while the global economy is witnessing geopolitical tensions and fears of a recession in the US economy extending to the European Union and Asia during the next year

The consequences of the Russian-Ukrainian war have added pressures on the world’s economies through inflation, while the European Union countries are facing a shortage of gas needed for power generation, which casts negative shadows on their economies however, many countries will benefit from high growth rates due to the high demand for their trade, especially the oil-producing Arab countries, as well as other countries that have not witnessed any negative effects of the existing global conditions

The International Monetary Fund classified Guyana as the fastest growing economy in both forecasts issued last April and this October, with a growth rate of 57.8 percent this year. The sparsely populated country is growing thanks to new oil exploitation projects

In second place, Iraq came with economic growth expectations of 9.3 percent, driven by the rise in global demand for crude oil and natural gas, as Iraq is a major exporter of crude

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Iraq is the second largest producer of crude oil in the Organization ofOPEC” after Saudi Arabia, with an average daily production of 4.6 million barrels per day, of which about 3.3 million barrels per day are exported under normal conditions

In third place came Ireland, whose growth has been significantly revised upwards, bringing the IMF’s forecast of 9 percent this year but Ireland’s GDP is notoriously volatile due to the many multinational corporations that are based there that benefit from favorable tax laws within the European Union

In fourth place came Kuwait, which is expected to record a growth of 8.7 percent this year, driven by the growth in global demand for crude oil, as the country produces an average of 2.8 million barrels per day

In fifth place came Saudi Arabia, which is expected to record a growth of 7.6 percent during the year, a growth that comes thanks to crude oil exports and its high prices. Saudi Arabia is the second largest producer of crude oil in the world, with a daily average of 11 million barrels, and the largest exporter of it, with a daily average of more than 7.4 million barrels

In sixth place came Colombia, which the International Monetary Fund expects to record a growth of 7.6 percent, driven by the production of fossil bullet sources, while in seventh place comes Panama, with a growth rate of 7.2 percent

In eighth place comes Vietnam, which is expected to record a growth of 7 percent this year, followed in ninth place by India, with a growth rate of 6.8 percent

India’s GDP grew by 4.1 percent in the first three months of 2022, which cut annual growth slightly in 2021 to 8.7 percent due to Omicron’s restrictions that hampered economic activity in the fourth quarter of the Indian fiscal year. While in the first quarter of the new fiscal year (April to June), growth returned to 13.5 percent, looking at the big picture Indian GDP growth is still doing well globally

And Egypt ranked tenth in the world, which is expected to record a growth of 6.6 percent this year, driven by a package of reforms in cooperation with the International Monetary Fund  LINK

Iraq increases its holdings of US bonds by more than one billion dollars

19th October, 2022

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The US Treasury announced, on Wednesday, that Iraq increased its holdings of US bonds to more than one billion dollars during the month of August.

The Treasury said in its latest schedule, seen by Shafak News Agency, that “Iraq’s possession of US Treasury bonds for the month of August of 2022 increased by 1.043 billion dollars, or 3.02%, to reach 35.630 billion dollars, after it was 34.587 billion dollars in the month of July,” indicating “These bonds rose from the same month last year, 2021, when Iraq’s holdings of bonds amounted to $18.9 billion.”

And she added, “Iraqi bonds, including long-term guarantees amounting to 23.430 billion dollars and short-term guarantees amounting to 12.200 billion dollars,” noting that these bonds represent 0.44% of the world’s bonds.

In the Arab world, Saudi Arabia comes at the forefront of the most possessing countries, reaching $122.089 billion, followed by Kuwait with $51.031 billion, the UAE third with $47.767 billion, then Iraq fourth, Oman fifth with $7.134 billion, then Morocco with $3.708 billion.

She pointed out that “the most holder of US bonds is Japan, with a value of 1,199.778 trillion dollars, followed by China, with a value of 971,808 billion dollars, followed by the United Kingdom, with a value of 644.710 billion dollars, and then Luxembourg with 305.974 billion dollars.”  LINK

Economist: The tax has more than 100 trillion that has not been submitted to the final accounts

19th October, 2022

The economic expert, Dr. Safwan Qusay, confirmed that the tax has more than 100 trillion dinars as amounts that have been accumulated for decades, and have not been liquidated or final accounts have been submitted.

Qusay told Al-Maalouma that “tax deductions are deducted from government units according to purchases from suppliers, contractors and others, as many of the invoices submitted to those units are not real, but came from parties that manipulate the name of the store or the type of goods, and when they go Withholdings to the tax, the invoice holder does not review for the purpose of recovering the amounts because they are fake invoices.

He added, “The tax has accumulated amounts for decades that exceed 100 trillion dinars, and they have not been liquidated or final accounts are presented so that these trusts appear to those who return, and when the person concerned is not reviewed, it is assumed that they will turn into final revenues for the Iraqi state, but this procedure has not taken place.”

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And he indicated that “the corrupt were able to pass instruments to unknown parties, and it seems that there is more than one party responsible for the manipulation, especially since the party that confirms the entitlement is not the same as the one doing the disbursement, and therefore there is more than one party, as well as the body of the internal audit, in addition to the absence of a budget and lack of The presence of a return of the trusts indicates that there is a criticism that was seized by the issuers of the sukuk, and it is a criticism that does not belong to the parties to whom it was issued.”

He pointed out that “the investigations will clarify to whom the money was transferred, where it went and withdrawn, where the money will be recovered, and those who were behind the liberation of the fictitious checks will be punished.”   LINK

The Iraqi parliament is preparing a report on the “stealing of the century” and warns that the accused will be out on bail

19th October, 2022

The Parliamentary Integrity Committee announced, on Wednesday, that it will prepare a detailed report on the theft of two and a half billion dollars from the amounts of tax trusts in the Rafidain Bank.

This came in a press conference held by Sarwa Abdel Wahed, a member of the Parliamentary Integrity Committee, at the parliament building, with the participation of a number of committee members, and was attended by Shafak News Agency correspondent.

During the conference, Abdul Wahed said that the Integrity Committee will have a report to diagnose the main official responsible for the theft of the century, and everyone is responsible, indicating that the Iraqi judiciary must play an active role and the accused cannot be released on financial bail.

She called for the necessity of diagnosing all those involved in the theft, adding that there was talk about the former head of the Finance Committee and he is now an advisor to the Prime Minister, and the Office of the Prime Minister has a hand in the matter and sent a letter to the Tax Authority, and these, including the Tax Authority, Rafidain Bank and the Office of the Prime Minister must referring them to the judiciary, banning them from traveling, interrogating them, and arresting the accused.  LINK

Al-Mandalawi: We will not tolerate “the theft of the century” until those involved in it are imprisoned

19th October, 2022

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Today, Wednesday, the First Deputy Speaker of the House of Representatives, Mohsen Al-Mandalawi, stressed that there will be no tolerance in the face of “the theft of the century” until those involved in it are imprisoned in cooperation with the judiciary.

The media office of the First Deputy Speaker of the House of Representatives said in a statement received (Al-Oula News), that “Al-Mandlawi chaired an expanded meeting of the Parliamentary Integrity Committee, during which the former Minister of Finance hosted the agency “Ihsan Abdul-Jabbar”, the Deputy Minister of Finance “Taif Sami”, and a number of officials in The concerned departments, to find out the details of theft of the sums of deposits collected at the General Tax Authority.

Al-Mandalawi affirmed, “He will not tolerate the largest theft in the history of Iraq,” noting that “the Council will take real and serious measures until those involved in this theft are imprisoned in cooperation with the judiciary to protect public money.”

The First Deputy called on the judiciary to “take appropriate legal measures against all those accused of stealing the century,” stressing the need to “deter anyone who begs himself to tamper with the people’s capabilities and inflict the most severe penalties against those who prove their involvement in this crime, regardless of their position, to save the money and bounties of Iraqis from the hands of the corrupt.”  LINK

Source: Dinar Recaps

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