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Significance
The political establishment has given strong backing to the budget cuts ordered by Abadi. The 2016 budget has been amended to account for the collapse of Iraq's planned 2016 euro-bond issue and spending cuts. However, even its amended final version has significant weaknesses.
Impacts
Petrodollar allocations to oil-producing provinces will be cut.
Non-oil investment spending in Iraq will be almost entirely curtailed.
The fiscal crisis will not directly affect the war effort against Islamic State group.
Political pressure and protests may grow against the Abadi government.
Keywords:
Iraq,
ME/NAF,
IMF-World Bank,
economy,
debt,
fiscal,
government,
oil,
prices,
protest,
public sector,
security
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2016
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