An International Monetary Fund (IMF) mission led by Carlo Sdralevich visited Amman from May 27 – June 4, 2015 to discuss with the Iraqi authorities financial assistance to Iraq under the Rapid Financing Instrument (RFI). At the end of the visit, Mr. Sdralevich issued the following statement:

“The mission has reached a staff-level agreement with the Iraqi authorities for IMF emergency assistance of SDR 594.2 million (approximately US$833 million) under the RFI. Subject to IMF management approval, the staff-level agreement is expected to be submitted to the IMF Executive Board for consideration in July 2015.

“The Fund is ready to assist Iraq in its efforts to tackle the economic impact of the conflict with ISIS and the decline in global oil prices. The armed conflict continues to strain the country’s resources and has created a humanitarian tragedy, with an estimated 3 million internally displaced people. The violence has also caused extensive damage to infrastructure and private sector assets.

“Mainly because of the violence, the economy has contracted by 2.1 percent in 2014 and is projected to achieve only a modest recovery of 0.5 percent this year, despite solid growth in the oil sector. With low oil prices, export revenues have contracted, pushing the current account into a deficit expected to reach 8 percent of GDP in 2015. As a result, foreign assets have declined in 2014 to US$67 billion and are projected to fall further this year.

“Under the pressure of high conflict-related spending and weak oil revenues, the budget deficit is projected to rise from 5 percent of GDP last year to about 17 percent of GDP in 2015, despite the non-oil tax measures envisaged in the 2015 budget and strict control of expenditures, including through the prioritization of investment projects.

“We welcome the steps taken by the authorities to address these urgent challenges and support their request for IMF emergency assistance.

“The mission met with Minister of Finance Hoshyar Zebari, Acting Governor of the Central Bank (CBI) of Iraq Ali Allaq and officials from the ministries of finance, planning, oil, the CBI, and representatives from state-owned banks.

“The mission would like to thank the Iraqi authorities for their cooperation and the open and productive discussions.”