According to Standard & Poor’s Credit Rating Agency (S&P), Iraq’s credit rating remains at B – / B with a stable outlook, with an emphasis on financial and economic stability.
According to the report, which was approved by the Iraqi Ministry of Finance and its results were distributed in a statement received by Shafaq News agency, “the new classification was a reflection of the Ministry of Finance’s policy of continuous economic and financial reforms, in addition to maintaining the level of foreign currency reserves that exceed the external public debt and fulfilling other external financial obligations as a result of the stabilization.”
The report used several indicators in its classification, the most important of which are: the Iraqi parliament’s approval of the tripartite budget for the years (2023, 2024, and 2025), which aims to revive infrastructure projects and economic needs, and the formation of the government at the end of 2022, which led to a state of political stability.
“The prediction of a large current account surplus, within economic expectations, will add to the already strong foreign currency reserves, which works to support Iraq’s external capabilities to service the debt over the next 12 months,” the study stated.
The agency predicts that economic growth will average 2.6% per year from 2023 to 2026, owing to increased oil production and its effects on non-oil growth, as well as a drop in annual inflation rates to 4% in July 2023 from 5-6% in 2021 and 2022, owing to government measures such as currency revaluation, price control, and government support for food and energy prices.
While the agency’s report indicated the possibility of improving Iraq’s credit rating in the event of rapid economic growth, diversification of the oil and non-oil state’s public financial revenues, an increase in the per capita share of national income, and the continuation of financial and economic policy reform measures.