Loan for Salary

Sarko Ynuis
Economist

The Iraqi government in an early announcement has declared the current economic and financial situation cannot pay out the employees and the pensions.

The draft of finance act and filling the deficit have arrived at the council of representative more than one month to gain loans from the local banks and the international financial organizations but the problem hasn’t been solved between the
government and parliament yet.

The government asked for (41) trillion dinars for the last three fiscal months of (2020), however, the expense of the past (8) months was roughly (47) trillion dinars, for that reason the lawmakers attempt to decrease the number to (21) trillions.

The point that requires being concentrated is borrowing money for the salary. Such a cost will not return to the state funds because those take salary spends their money in the Bazar. As a result, the fiscal and bill future of Iraq put in danger and make a risk on the Iraqi central bank for lacking the foreign currency like dollar or gold. If the Iraqi parliament doesn’t accept the debt act and deficit of budget, the government may ask the central bank to print new currency at that time Iraq will lose the foreign reserve currency in the central bank.

In (2019) nearly (450000) employees increased while the general income has almost handed down to (40%)! The risk will promote more because the economy of Iraq concentrates on oil merely.

Due to lacking cash, providing salary may delay the next two weeks because of Iraq's needs (6) trillion dinars per month, one of the options that government has to follow is the compulsory saving of the employee’s salary till the end of the financial year of (2020).

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PM:07:12:12/11/2020



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