Iraq’s possible loan accord with the International Monetary Fund may unlock at least $15bn in aid this year and next, central bank chief Ali al-Allaq said, helping Opec’s second-biggest producer repair finances battered by cheap oil and the war with Islamic State militants.
Allaq said in an interview in Beirut he expects Iraq to receive $10bn in IMF and World Bank assistance. A further $5bn pledge may come from the Group of Seven meeting in Tokyo this month, he said.
“They will discuss supporting Iraq, but that’s linked to how convinced they are of the commitments” the country is undertaking under the IMF accord, he said. “So in total, we will receive $15bn, possibly more, in 2016 and 2017.”
IMF officials are holding talks with the government this week in Jordan over a stand-by loan deal. If successful, Iraq will be the first major oil producer in the Middle East to secure a loan accord with the Washington-based lender.
Oil producers from Venezuela to Riyadh have slashed spending to counter the plunge in crude prices. For Iraq, the challenge was compounded by a costly war against IS militants, who captured swathes of the country’s territories.
The country is also mired in political turmoil. Hundreds of protesters pulled down blast walls and forced their way into Baghdad’s Green Zone - which houses embassies, the Iraqi parliament and government ministries - on April 30 to demand more efforts to fight corruption and to protest what they regard as sectarianism in cabinet appointments.
Allaq said he has seen “no signs” that the unrest could affect talks with the IMF.
A worker checks a valve of an oil pipe at the Nasiriya oilfield in Nasiriya province, southeast of Baghdad. For Iraq, the oil challenge is compounded by a costly war against IS militants.
