Economist Warns Of Recession Signs: Low Inflation Is A Warning Bell

Economy 20-06-2025, 12:13 | 514  Baghdad Today – Baghdad  Economic expert Munir Al-Obaidi warned on Friday (June 20, 2025) of signs of recession that could turn into a broader crisis affecting the Iraqi economy,  indicating that the decline in inflation is a warning bell for the recession phase.

Al-Obaidi said in a post on his Facebook page, which was followed by Baghdad Today:
 
"The Iraqi Statistical Authority announced a decline in the country's monthly inflation rate by 0.3% during the month of April, while the annual  general inflation rate recorded 1.6%, and  core inflation 0.6%."  

He added, "It is noteworthy that food prices continued to rise by 3.2% annually, despite declines in the prices of bread, meat, and fish.
 
This is due to sharp increases in the prices of fruits and vegetables, which rose by 13.7% and 8.4%, respectively."  He pointed out that, "In contrast, tobacco prices declined by a significant 26%, while
clothing and footwear prices saw a slight annual increase of 2%.
 
Household appliances recorded a 1% decline, while furniture and office equipment prices rose by 0.5%."  He pointed out that "in terms of geographical distribution, the annual inflation rates, by region, were  1.1% in Kurdistan,  1.4% in the central governorates, and  3.1% in the southern governorates." 

Al-Obaidi explained that “the decline in prices, despite its positive impact on citizens, especially in sectors such as electrical appliances and furniture, may reflect a state of stagnation in the market,
as a result of   weak consumer confidence,  lack of liquidity, and a  decline in financing provided to the private sector, especially with the  weakness of insurance services provided by financial institutions.”   

He indicated that “although the decline in inflation may appear to be a positive indicator, it may also be an alarm bell for a phase of recession, threatening to  reduce job opportunities in the private sector and
 weaken the ability of local products to compete due to rising costs, which may lead to further pressure on the government sector in light of the high unemployment rates.”

 He continued, "What is required today is to closely monitor economic indicators and take serious steps to stimulate economic activity and support the private sector, so that signs of recession do not turn into a broader crisis that affects the entire Iraqi economy."    https://baghdadtoday.news/276915-.html