The global economic landscape has been grappling with intricate crises spanning economic, financial, and security dimensions for several years. The underlying causes of these crises can be largely attributed to soaring energy and food prices, which have been exacerbated by the ongoing Russian-Ukrainian conflict and the sanctions imposed by the United States and Europe on Russia. Additionally, the aggressive maneuvers by certain regional actors in Palestine, Lebanon, and Syria are shaping a new geopolitical landscape in the Middle East, further influenced by the military strategies supported by the United States and European nations.
Compounding these issues is the intensifying economic rivalry between the United States and China, which continues to reshape global economic structures, as observed in the divergent strategies of the Group of Twenty (G20) and the Group of Seven (G7) nations. The BRICS coalition and other international groups are also emerging to establish new economic power centers. Moreover, the recent economic policies introduced under the Trump administration—aimed at increasing taxes and customs duties on competing industrialized nations—have introduced additional uncertainty into the global economic order and altered trade dynamics.
The current crises are not merely theoretical; they have materially impacted the economies of major countries, leading to widespread stagnation. This trend is evident particularly in the United States, the European Union, and other geographical regions, where purchasing power has dramatically declined alongside local currency values. In this context, it is anticipated that our economy will experience detrimental effects from the global economic system, specifically concerning food supply management and basic commodity pricing. Oil prices may also fall below the projections outlined in the general budget for 2025, imposing further challenges on financial and banking reforms.
Economic stability fundamentally requires a robust financial and monetary system. Consequently, the Central Bank’s hedging measures for 2023 and 2024 have been strategically framed to address anticipated developments in upcoming crises. This includes building foreign reserves sufficient to cover local currency trading, imports, external debt commitments, and other international obligations. Moreover, there is an emphasis on diversifying reserves through a mixture of currencies, gold, bonds, and securities, alongside the implementation of policies and mechanisms to regulate foreign trade financing while adhering to global standards.
The Central Bank’s initiatives have borne fruit; its foreign monetary reserves have surpassed $107 billion, alongside 162.7 tons of gold. The World Gold Council has acknowledged Iraq’s position as the fourth largest holder of gold in the Arab world and twenty-eighth globally. These developments underscore the Central Bank’s commitment to achieving its monetary policy objectives, which include curbing inflation and maintaining overall price stability. Recent data indicates an annual inflation rate of 2.8%, with a core inflation rate of 2.5%, as well as efforts to regulate the money supply and stabilize the dinar’s exchange rate amidst fluctuations in the black market dollar rate.
Continual monitoring and assessment of the interest rate set by the Central Bank are essential. This necessitates a coordinated effort among financial policy makers and key economic sectors to ensure collaboration with the Central Bank in pursuit of economic stability and resilience against the global economic downturn, thereby mitigating its anticipated repercussions over the coming three years.
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