Iraq Expands Cooperation with the IMF to Strengthen Financial Stability
The Iraqi Ministry of Finance recently announced the outcomes of its meetings with the International Monetary Fund (IMF), emphasizing a renewed commitment to bolstering partnerships with foreign banking institutions. The IMF underscored the necessity of advancing the country’s banking sector as a cornerstone for economic development.
Meetings Overview and Economic Prospects
The Iraqi delegation, comprising Finance Minister Taif Sami Muhammad and the Governor of the Central Bank of Iraq, concluded its discussions with the IMF in Amman from February 24 to 26, 2025. The meetings aimed to assess Iraq’s economic performance as well as the prospects for sustainable growth. Acknowledgment was given to the progress made thus far.
The dialogues involved experts from various ministries including finance, planning, oil, and electricity, focusing on macroeconomic indicators. Notably, the non-oil GDP is projected to experience significant growth of 5% in 2024, primarily driven by an expansion in the agricultural sector and an increase in public spending. Growth is expected to continue at a rate of 3.5% in 2025. The mission confirmed that these figures indicate a diversification of the economy and a reduction in oil dependency, contributing to the stability of the national economy. Discussions also covered actual expenditures, anticipated revenues for 2024, fiscal expectations for 2025, and strategies for addressing the budget deficit.
Public Debt Strategy and Investment Confidence
The meetings further deliberated on updating the public debt strategy to enhance financial sustainability and boost investor confidence in government bonds. The IMF highlighted the critical importance of developing the banking sector to foster investments and attract foreign capital, thereby facilitating a more stable financial landscape.
In its communications, the IMF reiterated its support for Iraq in refining its financial policies, offering technical assistance through advisors and experts to aid the Ministry of Finance in managing public debt and improving the tax system in line with economic growth requirements.
Enhancing Cooperation with Foreign Banks
To promote financial stability, the parties agreed to intensify efforts in expanding cooperation with international banking institutions. This initiative aims to streamline external trade financing operations while enhancing the utilization of the Iraqi dinar in major transactions, thereby bolstering the national currency’s status.
Ongoing Commitment to Reforms
The statement concluded with a reaffirmation of the continued progress in financial and economic reforms, reflecting the Iraqi government’s dedication to achieving sustainability that supports development and stimulates investment. This effort is rooted in an ongoing strategic partnership with the IMF.
On February 26, Finance Minister Taif Sami engaged in further discussions concerning financial and banking reforms aimed at supporting the Iraqi economy during the periodic meetings held in Amman.
