Latest news with #MazharMohammedSaleh
Shafaq News
18-05-2025
- Business
- Shafaq News
Iraq's debt "very safe" below 33% of GDP
Shafaq News/ Iraq's total public debt remains below 33% of the country's gross domestic product (GDP), securing a low-risk standing in global credit rankings, an Iraqi official confirmed Friday. Speaking to Shafaq News, Mazhar Mohammed Saleh, financial adviser to the prime minister, noted that Iraq wiped out nearly $100 billion in legacy foreign debt through the 2004 Paris Club agreement, most linked to pre-1990 conflicts under the former regime. The remaining debt was restructured over two decades, with the final installment—a $2.7 billion bond—due for full repayment by 2028. During the war against ISIS, Iraq borrowed about $12 billion to support its national budget. The majority of these loans, especially those from the International Monetary Fund, have been repaid. In the coming four years, Iraq must repay $9 billion in external debt. A similar amount, mainly from international development funds, is dedicated to rebuilding areas liberated from conflict. External debt currently represents roughly 8% of GDP, which Saleh described as 'very safe.' Domestic public debt totals 85 trillion Iraqi dinars (around $65 billion), with half held in the Central Bank of Iraq's investment portfolio and the remainder mostly with state-owned banks or issued as bonds and treasury bills. Saleh attributed this accumulation to three significant downturns in oil revenues over recent years. Internal debt, however, makes up about 25% of GDP. Combined with external obligations, Iraq's total public debt stays below 33%—well under the widely accepted 60% threshold for sustainable debt levels. Saleh also highlighted an unresolved $40 billion in debt dating to the Iran-Iraq war that remains unsettled despite the 2004 Paris Club deal. These 'odious debts,' owed to eight countries, are expected to be written off by at least 80% under the agreement, pending verification.
Iraqi News
02-05-2025
- Business
- Iraqi News
PM Advisor: Tax deposits are part of the budget
Baghdad-INA Prime Minister's financial advisor, Mazhar Mohammed Saleh, confirmed on Friday that tax deposits are part of the budget that can be used to adjust government spending, while specifying the financial scope for government spending from tax deposits. "The world is living in a state of anticipation for fear of entering a phase of economic contraction, and then a major economic depression. This phase takes six months during which growth and unemployment levels in the global economy are monitored," Saleh told the Iraqi News Agency (INA). He pointed out that "Iraq is an important part of the world's energy system. A 1% drop in the world's GDP will undoubtedly lead to a half-percent drop in demand for oil, leading to a glut in supply, which requires a cautious policy from OPEC+ to help the group's countries protect their financial budgets for 2025 and the beginnings of the next fiscal year 2026." He added that 'a precise technical precaution to confront the oil asset cycle was assumed by the legislator when approving the three-year federal general budget (Law No. 13 of 2023 as amended) by adopting a conservative oil price of $70 per barrel of exported oil and with the export of 3.4 million barrels of oil per day,' indicating that 'this precaution is in two directions: the first is spending with a comfortable budget, but at the minimum possible limit of 160 trillion dinars annually instead of 200 trillion dinars annually, and the second direction: spending at the maximum limit while reserve with a maximum annual deficit of 64 trillion dinars.' Saleh continued, "In the 2024 budget, spending was within the comfortable minimum of 156 trillion dinars, with an average oil price of around $75 per barrel. This spending covered the entire operating budget, including salaries, wages, pensions, social care, and support, in addition to spending on more than 8,000 suspended government investment and service projects." He pointed out that "government borrowing, most of which is from domestic borrowing sources, recorded a financing indicator in the budget deficit of 7.6% of GDP, compared to 1.3% in 2023." He pointed out that "if oil prices fall to an annual average of $60, which is the maximum possibility in the 2025 budget, there are two options: either spending around 130 trillion dinars and maintaining the same deficit-to-GDP ratio as in 2024, or spending up to a ceiling of 156 trillion dinars and accepting actual bond borrowing that rises to 9% of GDP in order to secure salaries, wages, pensions, social care, support, and spending on service projects without interruption, taking into account the drop in oil prices and the two-fold contraction in GDP growth." Saleh pointed out that these are "the expected possible options unless the oil asset cycle improves, which in all cases depends on the upcoming OPEC+ policies regarding the future of production limits and the review of member quotas, as well as the development of the geopolitical situation in the world, especially in the Russian-Ukrainian war and the development of the situation in the Mediterranean Basin region, as the Gulf region is responsible for exporting nearly 40% of global crude oil exports, and this is reflected in the fluctuations in energy prices in global markets, including crude oil markets."
Iraqi News
20-04-2025
- Business
- Iraqi News
Government Advisor: Three-Year Budget Deficit is Precautionary and Controlled
Baghdad – INA Advisor to the Prime Minister, Mazhar Mohammed Saleh, stated that the annual deficit outlined in Iraq's three-year budget is precautionary and within the set ceiling of 200 trillion dinars. The budget is based on a preventive fiscal approach aimed at achieving economic and social goals without threatening financial stability or increasing public debt. Saleh explained that the projected deficit of 64 trillion dinars was calculated based on oil exports of up to 4 million barrels per day at an average price of $70 per barrel. However, actual 2024 spending remained at 156 trillion dinars, with limited domestic borrowing and higher oil prices averaging $75 per barrel. He emphasized the need for tighter control over expenditures—especially operational costs—due to fluctuations in global oil markets. Saleh also highlighted the importance of prioritizing essential spending such as salaries, pensions, and social welfare, while encouraging greater private sector involvement in development projects. The 2025 budget, he said, must reflect current global economic conditions and oil market trends affecting Iraq and other OPEC+ countries.
Iraqi News
21-03-2025
- Business
- Iraqi News
PM Advisor: Electronic tax collection will achieve greater growth in non-oil revenues this year
Baghdad-INA Prime Minister's financial advisor, Mazhar Mohammed Saleh, confirmed on Friday that positive indicators in electronic tax collections will be evident throughout the current fiscal year 2025. Saleh told the Iraqi News Agency (INA): "Although digital collection began last year 2024 in a gradual and effective manner, achieving a leap in these collections, exceeding 6 trillion dinars in the aforementioned fiscal year, is an indicator that reinforces the phenomenon of maximizing the growth of cash flow through digital systems to support the unified treasury account within a high-level and quality digital network connection and in the interest of consolidating general budget revenues, which is something we expect to take broader growth levels in collecting non-oil revenues in the current year." He added, "These positive indicators in electronic collections will occupy a comprehensive space in the current fiscal year, reflecting the development of state revenues as a result of the accelerated transition to the use of electronic systems, which often leads to increased efficiency, reduced corruption, and improved transparency in the collection process. They represent an optimal application of the government program in one aspect of e-governance, namely the public finance aspect, which is strongly moving towards the use of modern information and communications technology systems to achieve the country's financial policy objectives of accurately and sustainably collecting non-oil resources."
Shafaq News
27-01-2025
- Business
- Shafaq News
Iraq's $100 billion foreign reserves: Safeguarding stability and global credibility
Shafaq News/ Iraq's foreign currency reserves, now exceeding $100 billion, play an essential role in maintaining economic stability, supporting the local currency, and enhancing the country's global creditworthiness, officials and economic experts said. Mazhar Mohammed Saleh, the financial and economic advisor to the Iraqi Prime Minister, told Shafaq News that foreign reserves are essential for addressing balance-of-payments challenges and stabilizing the economy. "Countries with substantial reserves ensure economic stability and can address balance-of-payments issues effectively," Saleh said. He emphasized the importance of diversifying reserves into foreign currencies, gold, and bonds, adding that the US dollar remains the dominant global currency. "The dollar is the most accepted and widely used currency for international transactions and offers the greatest flexibility," he explained. "Countries prefer assets that provide stable annual returns, like government bonds. Gold, by contrast, does not offer fixed returns and is harder to liquidate during crises compared to foreign currencies and bonds," he said. Iraq's Reserve Composition According to the Central Bank of Iraq, the country's reserves consist of $106 billion in foreign currencies and gold, including 152.6 tons of gold valued at $16 billion. This makes Iraq the 29th-largest holder of gold globally and the third in the Arab world, following Saudi Arabia and Lebanon. Economic expert Abdul Rahman Al-Mashhadani, a university professor, explained that Iraq invests portions of its reserves in US Treasury bonds, with holdings ranging between $31 billion and $34 billion, while the remaining reserves remain liquid. "The reserves are the property of the state, not the government, ensuring long-term economic stability," he said. 'Gold in Iraq's reserves is used strategically to generate returns by taking advantage of market fluctuations, Iraq buys gold when prices drop and sells when they rise, earning profits. However, storing gold in global banks incurs storage fees," Al-Mashhadani added. According to Al-Mashhadani, despite its substantial reserves, Iraq lacks a sovereign wealth fund to reinvest surplus revenues into diverse sectors, unlike countries like Saudi Arabia. "Iraq does not have sovereign funds to invest surplus reserves, which limits opportunities for diversification." External Investments Former Central Bank of Iraq official Mahmoud Dagher said Iraq's reserves are distributed globally among major financial institutions. "Iraq holds reserves in institutions like the US Federal Reserve, the European Central Bank, the Bank of England, and the Bank for International Settlements in Switzerland, as well as in banks in the UAE and Saudi Arabia," Dagher said. These reserves are made up of foreign currencies, bonds, and gold. "The Central Bank of Iraq manages these assets, generating returns through investments in bonds and other financial instruments. This is what we call external investments," Dagher explained. Currency Stability Jamal Cougar, a member of the Parliamentary Finance Committee, highlighted the importance of the reserves in stabilizing Iraq's currency. "The large reserves serve as a critical safeguard for the local currency, ensuring its stability. They allow the central bank to intervene in case of any disruptions in financial policies," he said. Amid many speculating that the currency would collapse, Cougar dismissed these concerns saying that 'such fears are unfounded'. Long-Term Growth Economist Hilal Al-Taan said Iraq has significantly increased its reserves since 2003. "Iraq's foreign currency reserves have grown to over $110 billion, with gold holdings exceeding 150 tons. These reserves are a testament to the country's financial resilience and economic growth," he said. Taan explained that Iraq's reserves generate consistent returns through strategic investments in bonds and currencies. "The continuous reinvestment of these reserves contributes to long-term financial stability and steady returns," he concluded.
