IMF Forecasts Decrease in Iraq’s External Debt in 2023

The International Monetary Fund (IMF) has projected a reduction in Iraq’s external debt by $1.2 billion in 2023, according to its latest report for May, titled “Safeguarding Macroeconomic Stability Amid Ongoing Uncertainty in the Middle East and North Africa.”

The report highlights that “Iraq’s external debt is expected to decrease to $22 billion in 2023, down from $23.2 billion in 2022,” indicating a positive trend. The IMF further predicts a decline to $20.8 billion in 2024.

The report emphasizes the significant decline in Iraq’s external debt, starting from $122.4 billion in 2000, gradually reducing to approximately $48.6 billion in 2020 and reaching $33.1 billion in 2021. This downward trend continued, with the external debt decreasing to $23.2 billion in 2022.

Among oil-producing Arab countries, Bahrain held the highest external debt, amounting to $197.1 billion in 2022. The IMF anticipates a further increase to $200.1 billion in 2024. On the other hand, Algeria had the lowest external debt among oil-producing countries, with its debt standing at $1.5 billion in 2022.

The projected decrease in Iraq’s external debt signifies a positive development for the country’s economy, reflecting efforts to manage and alleviate the burden of debt. This reduction could provide greater financial flexibility, allowing for more investment in vital sectors, infrastructure, and socioeconomic development.

However, it is important to note that sustaining this positive trajectory will require ongoing fiscal discipline, efficient resource management, and the implementation of structural reforms to diversify the economy and reduce dependency on oil revenue.

Iraq’s ability to maintain economic stability and further reduce its external debt will be crucial for long-term sustainable development and fostering investor confidence. Continued collaboration with international financial institutions, such as the IMF, can provide valuable support and guidance in this regard.

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