Page 25 - investment-map-En-2021

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Iraq Investment Map2020-2021

Money Circulation Speed: Iraqi economy witnessed a big deceleration in the speed of
money circulation. Speed of money circulation is considered as an analytical indicator for
the average of inflation rate and in many occasions can unravel the reality of this average,
as the speed of circulation had decreased from 3.2 times in 2014 to 2.7 times in 2015,
decrease again to 2.6 in 2016 to raise in 2017 to reach 3.1 times which means that the
number Iraqi dinar spent within a year had rebounded again as a result to the policies
followed by the government and the central bank to avoid falling in economic crisis.

Table (12)

Money Circulation Speed and factors affecting it for the years (2012-2017)

National Income in
Year current prices (billion Money supply Money circulation
(Billion Dinar)
speed (times) (1/2)
Dinars) 1
2012 227222 637336 3.6

2013 243517 73831 3.3

2014 236708 72692 3.2

2015 185551 65435 2.7

2016 186397 70733 2.6

2017 220906 71162 3.1

Source: Central Organization for Statistics, National accounts directorate

Interest Rates: there are several effects and dimensions for interest rates that extend
deeply in macroeconomics; as it widely affects investment especially the productive side
of it which contributes to expanding the productive capacity and increasing the resilience
of the production system; on one hand it affects the investment costs and on the other has
an impact on the capital sufficiency limits.
Interest rate represents the cost of the borrowed capital, the increase in the interest rate
leads to higher borrowed capital cost and in the end to low investment; investment is
reversely connected with the interest rate as it depends on the real interest average
considering it as cost of borrowing, and the trend of the investment mark is minus: raising
the interest rate leads to lowering investment levels and vice- versa.
On the other hand, interest rate affects the sufficiency limits of investment as well as the
present value of the future income streamline and the market interest rate connects

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