Dr. Wejdan Faleh Hassan – University of Maysan.
Summary:
- The financial policies that accompanied the response to the Corona epidemic, including debt relief policies, and the indebtedness of governments, whether from within or abroad, have contributed to increasing financial pressures on the governments of countries in the world.
- The consequences of the war in Ukraine led to a rise in oil prices to more than 40% in the first quarter of this year, gas by 112%, and coal by 261%. Food prices are also on the rise, including wheat prices, which have increased by 78%, and oil by 63.2%. These increases will inevitably cast a shadow on global inflation.
- The climate crisis in the world will push the adoption of strategies and the transfer of expenditures, as well as the need for countries to achieve food security, which means that expenditures will rise in different directions, pushing toward inflationary repercussions that affect economies in the world.
- The US Federal Bank increased the money supply by 40% in two years, which affected the money supply in the world; Because the dollar is a global currency.
- Raising interest rates in the United States, Europe, and Britain to very high rates, reaching 75% in America, did not help mitigate the inflationary effects of the global crises.
- Iraq will suffer from a complex crisis due to inflationary pressures. On the one hand, it will suffer from imported inflation, and on the other hand, the austerity government policies with the inability to pass economic reforms; Because of the political crisis, the effects will be greater.
- The global inflation crisis will have negative effects on the Iraqi economy, even if at first glance it seems beneficial – because it led to a rise in oil prices -, but other aspects of it will lead to great losses to the Iraqi economy in light of its inability to absorb the growing demand, and the weakness of its agricultural and industrial sectors, which must keep pace with this increase in demand.
