Iraq signs USD270 mn loan from Japan

Baghdad (IraqiNews.com) Iraq has signed for receiving a Japanese loan worth USD270 million, Iraqi websites quoted the Japanese embassy in Iraq saying in a statement.

The loan is designed to improve Iraq’s financial situation and to help the country proceed with reforms, the statement by the embassy said, noting that it comes as a second tranche of a USD500 million Japanese financial assistance commitment.

The statement said falling world oil prices and spending on defense and refugee relief portfolios had largely reduced the country’s budget resources. It also pointed to earlier assessments by the International Monetary Fund which estimated Iraq’s budget deficit for 2016 by 14.1% and public debt for the same year by 6.99% of the GDP.

In February, Japan approved a loan of about $100 million to support humanitarian, counter-terrorism and infrastructure projects in Iraq.

In January, Japan agreed to lend Iraq up to 27.2 billion yen ($240 million) to rebuild damaged electricity infrastructures in areas recaptured from Islamic State militants.

Iraq’s war against Islamic State militants since 2014, the need to address the dilemma of nearly three million people displaced by the war and falling world petroleum prices have all worsened Iraq’s economic situation, prompting the government to turn to world donors.