IMF announces $5.4B loan over 3 years to Iraq

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The International Monetary Fund says it is lending $5.4 billion over three years to Iraq, which has been hit hard by a sharp drop in oil prices.

IMF official Christian Josz made the announcement at a news conference Thursday in Jordan.

Iraq's oil-reliant economy has been knocked hard by plummeting oil prices in international markets. The drop has wreaked havoc on the country's national budget, financed almost entirely by oil revenues.

Large-scale land grabs by the extremist Islamic State group since 2014 exacerbated economic decline, forcing the Iraqi government to divert large sums to fighting the militants.

In 2016, Iraq has a budget of close to $90 billion, with a deficit of about $20.5 billion. The government hopes to narrow the spending gap with loans from local and international lenders.