The effect of the Novel Coronavirus (COVID-19) on the Iraqi Economy

As a result of the spread of the novel Coronavirus and the emergence of many challenges facing the global economy, novel coronavirus appeared in December 2019 in Wuhan city/China, and the World Health Organization(WHO) subsequently announced the virus as a worldwide epidemic in March 2020, most of the countries have cut off their commercial exchange with China. The outbreak of the novel Coronavirus in China has led to many negative impacts on the Chinese economy as most of the government's efforts focused on facing the imminent threat posed by the Novel Corona Virus through financing the health sector and building temporary hospitals which helped China to win their war against the virus and reduce the rate of infections and make them almost non-existent at the end of March 2020, which greatly affected the volume of China's demand for the Iraqi oil in particular and the Iraqi economy in general. Iraq is considered one of the most countries that are expected to be affected by the current Novel Coronavirus for a variety of reasons First, the revenues of the Iraqi economy depend on oil as a primary resource and the significant dependence on the Republic of China's on the Iraqi oil as it is the second importer of Iraqi crude after India, as the price of Brent crude on 26-3-2020 reached its lowest level by $ 26.78.Second, the partial dependence of Iraq's economy on religious tourism, which was stopped entirely due to quarantine that was imposed in the Iraqi cities. All of the previous reasons led to the paralysis of the market due to the imposition of curfews in addition to the absence of virtual electronic platforms on which the government offices and the private sector could depend on as an alternative to the cessation of most of the governmental agencies and local markets from working, as evidenced by the fact that in 2018, Iraq ranked 155 out of 197 in developing its electronic government.

The Iraqi economy faced another dilemma because of the Novel Coronavirus, which predicts a real catastrophe in 2020. The Iraqi budget was designed on the basis that the oil price is $ 55 and current prices are less than $ 30, which will cause a budget deficit that requires the government to take the needed procedures to find temporary solutions to face the current crisis.