Friday, February 20, 2004

Iraq's economy is providing pleasant surprises, including booming consumer demand, strong oil revenue and healthy foreign exchange reserves, a top Treasury official said Thursday.

"The economy is beginning to work and thrive again and grow," John Taylor, undersecretary for international affairs, said by telephone from Baghdad.

U.S. occupation authorities estimate Iraqis have imported 1 million cars and trucks and more than 500,000 satellite dishes since fighting ended in April, Taylor said.

Other signs of improvement:

Oil revenue. On an annualized basis, oil exports are running $1.5 billion ahead of projections by U.S. authorities and Iraqi technocrats, who forecast 2004 revenue at $12 billion.

The currency. Iraq's new dinar, introduced in October, has gained value against the U.S. dollar. U.S. officials originally worried Iraq could deplete its foreign currency reserves if Iraqis weren't confident in the dinar.

Building materials. Demand for cement, asphalt and other construction material is boosting the economy, Taylor said.

He said controls on interest rates for bank loans and deposits will be lifted March 1. A fully functioning central bank and finance ministry should be in place by June 30, when the U.S.-led Coalition Provisional Authority is to hand power to an Iraqi government, he said.

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