- The number of readings 157
- Section : Iraq
Baghdad / Al-Masalla: The Financial Adviser to the Prime Minister, Mazhar Muhammad Salih, revealed, on Thursday, May 6, 2021, the economic challenges that the government faced, while indicating that it had succeeded in closing the deficit gap and facing recession within a year of its life.
Saleh told Al-Masalla, “The fiscal year 2020 was one of the most difficult years the country has gone through after the dual crisis (security and financial) in 2014, as the GDP decline was accompanied by a negative 10 to 11% due to the decline in oil import revenues by more than 40. % Of its traditional similar flows in 2019, as a result of the oil price war and the OPEC Plus agreement regarding reducing the shares of member countries to remove the oil glut that exceeded 10% of the global oil market needs, in addition to the closure of local economic facilities and disruption of production facilities due to the pandemic and the high unemployment to nearly 25% of the labor force is in a market economy. “
Saleh added that “public finances continued to face the double crisis (health and economic) by working in managing public expenditures and public revenues with high accuracy and effort without the presence of legislation legislation for the federal public budget 2020, and it is facing the challenge of the severity of financial and economic shocks (external and internal) and their severe effects on the sustainability Fiscal policy throughout those lean months. “
He continued, “The financial management has continued to work according to the contexts provided by the enforceable financial management law, while it is facing a deficit in the monthly revenues that are not sufficient to cover the financing of actual current expenditures at a rate of 1/12 of the general budget for the year 2019, based on the rules of operation of the Financial Management Law in force,” pointing out to “The available cash assets from monthly revenues did not increase at that time (2019) from 4 trillion dinars per month and perhaps less, while current expenditures payable remained in excess of 7 trillion dinars, whether from salaries, pensions and social welfare, or the payment of farmers, contractors and services. Debt and energy purchases of all kinds, and obligatory repayment.
Regarding facing these challenges, Saleh asserted that “public finances had no choice in closing the deficit of expenditures payable except by resorting to internal borrowing priorities that supported the government banking system in general and the Central Bank of Iraq in particular in implementing the two borrowing laws that were legislated in the House of Representatives.” As an alternative to the General Budget Law 2020. “
Saleh stated that “the Iraqi banking system provided liquid financial resources that contributed to bridging the financial deficit gap and facing the severe economic downturn represented by (deteriorating economic growth, high unemployment and a decline in the general level of prices) with liquid resources amounting to about 27 trillion dinars in the year 2020, which is in the form of internal debts financed by the agency The government banker is exclusively the case (which is equivalent to debts from government financial institutions to the government itself. “
The government advisor considered that “the Ministry of Finance succeeded in bypassing the financial stress tests that the country was exposed to with all its economic variables in 2020 despite the gravity and risks of the local and global economic situation together.”