A new statement from the Iraqi Minister of Finance about the budget, the dollar and oil..

08.06.2021 – 13:23
A new statement from the Iraqi Minister of Finance about the budget, the dollar and oil..

Baghdad – people  

Iraqi Finance Minister Ali Allawi announced that the 2022 budget, which the ministry began preparing a few days ago, will have a reform dimension, stressing that the next year’s version “is different from previous budgets” and reflects “the reality of Iraq’s obligations.”  

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He explained in a statement followed by “Nass”, Friday (August 6, 2021), that the ministry will seek to submit this new budget to Parliament before the early parliamentary elections scheduled for October, adding that it will be a “reform budget, but it may be politically difficult.”  

He said that the ministry “tried in the previous budget to do a similar thing”, as it “presented the budget in a way that shows officials the size of Iraq’s real obligations without paying them in arrears corners, so the number was large and was not politically acceptable, so it was amended and the budget was issued” in its current form.  By this, the minister most likely hinted at the difficulty of passing the new budget due to the high value of the deficit in it, as happened in the previous budget.

In the proposed 2021 budget bill, which the government submitted to Parliament, the value of the deficit was estimated at 49 billion dollars. However, the deputies made up the difference by canceling debts and dues from the state in exchange for energy sources from the account, especially dues for Iranian gas and energy, and other payments for infrastructure.  

The value of the deficit in the 2021 budget, as approved by Parliament, amounted to 19.8 billion dollars, compared to 23.1 billion dollars in 2019, knowing that Iraq did not approve the 2020 budget due to political tension.  

The total value of revenues in the 2021 budget amounted to about 69.9 billion dollars, calculated based on the export of crude oil on the basis of a price of 45 dollars per barrel, and an export rate of three million and 250 thousand barrels per day. As for the value of the 2021 budget, it amounted to $89.7 billion, about 30% lower than the last budget approved in 2019.  

The minister explained that the price of a barrel in the new budget will be 50 dollars, which is an adjustable figure. However, the value of a barrel of oil in the market is currently much higher and exceeds sixty dollars.  

Iraq, the second largest oil producer in OPEC, is going through its worst economic crisis. The poverty rate in the country has doubled in 2020, and 40% of the population of 40 million is considered poor, according to the World Bank, while the Iraqi dinar has lost 25% of its value.  

Corruption, which has cost Iraq twice as much as its gross domestic product, or more than $450 billion, is the main concern of Iraqis who suffer from a lack of electricity, hospitals and schools.  

However, the minister said that Iraq’s financial situation has improved this year due to “the rise in the price of oil and the change in the exchange rate of the dinar.”  

Meanwhile, Iraq is negotiating with the International Monetary Fund on a loan amounting to between 3 to 4 billion dollars, as the minister explained, hoping to reach an agreement with the Fund by the end of the year.  

He explained that this “borrowing is of a monetary nature and gives credibility to the reforms” that the ministry wants to implement, and “their end depends on our current situation and the 2022 budget if we are able to present it to Parliament before the parliamentary elections.”


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