Moody’s keeps Iraq’s credit rating at Caa
Moody’s logo outside its headquarters in Manhattan, New York, U.S. Photo: Reuters
Baghdad (IraqiNews.com) – Moody’s credit rating agency kept Iraq’s rating unchanged at ‘Caa,’ with a stable outlook.
Moody’s explained that the rating reflects Iraq’s current situation considering its financial dependence on hydrocarbons, making the country greatly exposed to fluctuations that may occur in oil prices.
The agency also expected that the escalation of the war in Gaza and the intervention of other parties in the conflict would have fundamental repercussions for Iraq.
In early June, the International Monetary Fund (IMF) released a dire assessment of the situation facing the Iraqi economy due to factors such as the reduction in oil production, changes in currency exchange rates, and the disruption of oil flows via the Iraq-Turkey oil pipeline.
The IMF mentioned that the growth of the Iraqi economy has slowed in recent months after oil production recovered last year and restored the level it reached before the outbreak of the Corona pandemic.
The IMF also expected that oil production would be reduced by five percent in 2023 due to OPEC+’s decision to reduce oil production and the halt of oil flows from northern Iraq to the Turkish port of Ceyhan.
The statement was issued by experts at the IMF who conducted a review of the Iraqi economy at the time.
Moody’s is one of the big three credit rating firms, along with Standard & Poor’s and Fitch Group.
By measuring potential investor loss in the case of default, the firm uses a standardized rating system to rate the creditworthiness of debtors.