IMF Advises Iraq To Increase Investment In Oil Sector

The International Monetary Fund says Iraq needs to increase its investment in the oil sector, where growth in output is lagging.

Takatoshi Kato, IMF deputy managing director, said Iraqi authorities have taken “important measures” to keep their economic program on track despite the difficult security environment.

“However, the expansion of oil production is lagging and inflation, while on a downward path, remains high, reflecting in large part shortages associated with the security situation, notably of fuel products,” Kato said. “A turnaround hinges critically on an improvement in the security situation.
“Measures to speed up reconstruction and increase investment, especially in the oil sector, are needed.”

Kato recommended enhancement of the protection of oil installations.

He praised the government for its commitment to pursue a prudent fiscal policy. Kato also lauded the central bank for policies helping lower inflation, but said it “will need, however, to continue its tight monetary and exchange rate policies to further reduce inflation and de-dollarize the economy.”

Zawya