IMF Loan To Go Ahead

Despite warnings from Baghdad that it might not be able to meet IMF conditions for a new US$5.5bn financing arrangement, we still expect a deal to be struck between the two parties over the coming months. Such an IMF programme would provide a policy anchor for the government, which could in turn boost investor sentiment towards the country. It would also go a long way to closing the government's fiscal gap, which we expect to come in at around US$10bn in both 2009 and 2010 on the back of relatively low global oil prices (at least compared to 2008 levels).

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