The downward shock to oil prices will triple Iraq's fiscal deficit and push the current account balance into a deficit over 2020. Nevertheless, Iraq will remain the world's fourth-largest producer of oil, and one of the lowest-cost producers. This should ensure that the country's merchandise trade position remains deep in surplus despite the terms of trade shock. We expect expenditure reduction and assets from 2018's large fiscal surplus to partially mitigate the full effects of the shock. We are therefore affirming our 'B-/B' sovereign credit ratings on Iraq. The outlook remains stable. On March 26, 2020, S&P Global Ratings affirmed its 'B-' long-term and 'B' short-term foreign and local currency sovereign credit ratings on Iraq. The outlook is stable. As
