In our view, Iraq faces security and institutional risks that are among the highest of all rated sovereigns--stemming primarily from its war with ISIS--as well as significant fiscal and external pressures due to the sharp fall in oil prices in the second half of last year. However, Iraq benefits from massive oil reserves and high oil exports. Projected large increases in oil production will, in our view, support economic growth and help alleviate fiscal and external pressures over the medium term. We are assigning our 'B-/B' long- and short-term foreign and local currency sovereign credit ratings to Iraq. The stable outlook is premised on our expectation that fiscal and external deficits will not worsen beyond our forecasts and that the
