Middle-east Arab News Opinion | Asharq Al-awsat

Iraq Gets Initial Approval for Islamic Development Bank Loans | ASHARQ AL-AWSAT English Archive 2005 -2017
Select Page
Media ID: 55351431

A worker at an oil field in Iraq. Reuters

The Islamic Development Bank has given its initial agreement to provide $3 billion in easy loans and grants to cash-strapped Iraq after a similar measure was announced by the International Monetary Fund this month.

The Islamic bank’s loan is aimed at helping Iraq cope with a sharp decline in oil revenue, a central bank spokesman in Baghdad said Thursday in an email.

The spokesman did not give further details.

Iraq earlier this month agreed a $5.4 billion standby loan with the IMF.

Finance Minister Hoshyar Zebari announced the agreement on May 19, saying the IMF loans could unlock $15 billion more in international assistance over the next three years.

Iraq’s oil-reliant economy has been hit by plummeting oil prices since mid-2014 and the country is expected to have a financing gap of $17 billion this year unless it can secure more funding, an IMF document obtained by Reuters showed.

Large-scale land grabs by ISIS since 2014 exacerbated economic decline, forcing the Iraqi government to divert large sums to fighting the militants.

In 2016, Iraq has a budget of close to $90 billion, with a deficit of about $20.5 billion. The government hopes to narrow the spending gap with loans from local and international lenders.

Last year, Iraq secured $1.7 billion in loans from the World Bank and $833 million from the IMF.