IMF Provides $3.6 Billion Loan to Iraq

The money will help Iraq implement its two-year economic plan, which includes

- Improved public financial management and budget implementation

- Increased transparency and accountability in the oil industry

- Banking sector reforms.

Iraq’s economic growth slowed to 4 percent in 2009, but is expected to climb to 8 percent in the coming years as oil production increases gradually, according to the IMF.

"The economic program for 2010 and 2011 aims at providing a sound macroeconomic framework during a period of economic and political uncertainties. Consistent with this program, the 2010 budget adopted by parliament seeks to contain current spending while increasing investment to address Iraq’s large rehabilitation needs and improve public service delivery," said IMF Deputy Managing Director Takatoshi Kato.

The loan comes just ahead of parliamentary elections in Iraq, scheduled for the first week of March.

Savings funded a difficult year

Iraq’s economy has been seriously affected by the drop in oil prices from their peak levels in 2008, the IMF said. With oil revenues accounting for the bulk of the country’s export receipts and government revenues, both the balance of payments and the budget saw large deficits in 2009. Thanks to savings built up in earlier years, these deficits could be financed.

In 2010 and 2011, the funds from the IMF will be used to support Iraq’s budget and to help pay for imports. Current government spending will be contained over the next...

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