IMF and World Bank Plug Short-term Funding Gap

The International Monetary Fund (IMF) today approved a two-year support program for Iraq, amounting to about US$3.64 billion, to cover the country’s balance of payments needs. The Board’s approval makes approximately US$455 million immediately available to the Iraqi authorities.

According to IMF’s Mr. Takatoshi Kato: “Iraq has made substantial progress in rebuilding its economy and consolidating macroeconomic stability under difficult security and political conditions. The economy was severely affected in 2009 by the drop in international oil prices. The current account and the overall balance of payments are expected to remain in deficit in 2010 and 2011. Similarly, the fiscal position is projected to record large, albeit declining, deficits in both years, before returning to a surplus position in 2012.”

To ensure the continuation of key social and infrastructure projects, the World Bank has also has approved the first of two $250 million loans to the country.

(Sources: International Monetary Fund, UpstreamOnline)

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