The International Monetary Fund (IMF) has cited Iraq’s monetary policy as the reason for turning down an Iraqi request for a loan package to reduce its 2011 budget deficit, an advisor to the Iraqi government said on Sunday.
AKnews reports that despite the IMF’s rejection, talks between Iraq and the fund continue.
“The IMF… is not satisfied with the current Iraqi financial policy and has urged the government to make extensive changes”, said Abd Hussein al-Jaberi, a member of the board of advisors to the Council of Ministers.
The IMF has reportedly called for:
- changes at the level of the spending;
- reduction of inflation;
- a plan to encourage the private sector; and,
- a plan to address employment levels in governmental departments.
The Iraqi Finance Ministry called on the Ministry of Industry and Minerals to work on transforming its subsidiaries into self-financing companies in order to cover the expenses of its employees.
The Ministry of Planning and Development has said there is a huge workforce in governmental departments.
“Iraq has promised the IMF to address the monetary issues”, said al-Jaberi, “but talks are still underway between the two sides to come up with solutions”.
The Iraqi Finance Ministry announced last month the finalization of Iraq’s 2011 draft budget, the majority of which has been devoted to investment. The 2011 budget amounts to US$86.4 billion, up from around US$72 billion last year.