Iraq’s move to secure financing from the International Monetary Fund (IMF) has raised questions about the country’s fiscal direction, after economic expert Ziyad Al-Hashemi announced on Saturday that negotiations between Baghdad and the Fund had begun, with expectations of strong support for Iraq’s loan request.
In a Facebook post, Al-Hashemi cited information from IMF sources indicating that discussions with Iraqi officials were underway, suggesting that the international financial institution was prepared to back the country’s efforts to obtain funding.
He said the development raised concerns about the government’s earlier justification for reducing the value of the Iraqi dinar. The exchange-rate adjustment had previously been presented as a measure to avoid more difficult alternatives, including borrowing from abroad.
Al-Hashemi argued that seeking IMF financing appeared inconsistent with those explanations and called on the government to clarify why it was pursuing external loans, particularly following the recent change in the dinar’s exchange rate.
He also warned that a potential agreement could include conditions requiring tighter control over public spending and measures to increase state revenues. These could extend to reviewing government subsidies for key sectors, especially fuel and electricity.
According to Al-Hashemi, the consequences of borrowing may emerge gradually as the government receives funds and begins implementing the agreement’s requirements. He cautioned that the Fund’s recommendations could become binding obligations if a formal deal is reached.
Meanwhile, IMF Managing Director Kristalina Georgieva said on Saturday that the Fund intended to provide strong support to Iraq through its requested lending program, emphasizing that the assistance would cover both financial resources and economic policy guidance.
