2023-11-25T04:58:16+00:00
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/ Moody’s credit rating agency maintained Iraq’s CAA1 rating, warning that the escalation of the conflict between Israel and Hamas and the intervention of Iran and the United States may have fundamental repercussions on Iraq, if the war expands.
The agency said that the ongoing conflict between Israel and Hamas remains primarily focused in Gaza. But its regional escalation, which is a “scenario with little possibility of being achieved,” will have economic repercussions for Iraq.
The agency notes that any escalation in tensions in the Gulf would threaten to disrupt maritime transport routes through the Strait of Hormuz, which Iraq depends on for most of its oil exports.
It maintained Iraq’s rating at “CAA1” with a stable outlook, and said that the rating reflects Iraq’s financial and external dependence on hydrocarbons, which leads to its significant exposure to oil price fluctuations and the risks of transitioning away from carbon.
However, the agency says that Iraq’s low reliance on external financing and the buffer provided by the recovery in foreign exchange reserves underscore a range of mitigating factors even if this scenario plays out.
Iraq, which is rich in oil, suffers from deterioration in its infrastructure and roads as a result of decades of wars and the spread of corruption.
Iraqi Prime Minister Muhammad Shiaa Al-Sudani confirms that one of his government’s priorities is to rehabilitate the transportation and road infrastructure, as well as the dilapidated electricity sector.