In light of the “Corona” outbreak on the one hand and the oil crisis on the other hand … Iraq is heading towards an economic meltdown

Selava Omar –

Observers believe that the pandemic of the Corona epidemic pushed the Iraqi economy to the brink of catastrophe, as the outbreak of the epidemic exacerbated the threat of public frustration and renewed social unrest if the needs of millions of Iraqis were not met through comprehensive reforms.

The Washington Post reported through a report published today, in which I talked about the economic situation of Iraq, where the newspaper says, “The political system that was born in the wake of the US-led invasion in 2003 became full of corruption, while the wealth of the political class increased, but the epidemic accelerated. From the crisis, which led to the collapse of international oil prices, as oil revenues were what kept Iraq afloat, while the closure process contributed to the destruction of livelihoods and increased hunger among Iraqi families.

At the same time, the spread of the epidemic exacerbated the demand for oil, just a few months ago, it was expected that about 90 percent of the state’s temporary budget for 2020 would come from oil exports on the basis of the price of $ 56 a barrel, so Iraq’s sales remained steady, but with pause Economies, oil revenues fell to their lowest level in a decade, according to figures published by the Iraqi Oil Report.

Ministry of Finance data indicate that oil revenues in April reached less than $ 2 billion to finance these costs, and it is expected that the deficit in the next month will be much greater.

Iraqi officials are concerned about the worsening economic crisis in the country. It is possible to bring more demonstrators to the streets in the coming months as temperatures rise in summer, and electricity and water supplies falter, as they have done repeatedly in recent years.

This closure has already sparked spontaneous eruptions in the city of “Nasiriyah” and the poor city of “Sadr” in Baghdad.

“I think the next two months will be very terrifying for everyone,” said Ahmed Tabaqli, chief investment officer at the Iraq Fund for Asia Frontier Capital.

“The only solution is to reduce employee salaries, but reducing these salaries will have disastrous consequences,” said Nabil Jaafar, an economist in Baghdad.

Although Iraqi officials say they will study proposals to strengthen the country’s financial position by reducing public sector salaries, experts say it is unlikely the government will make sweeping changes in the short term.

Source: Hawar News

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