Earth News / Mazhar Muhammad Salih, the financial advisor to the Prime Minister, identified today, Thursday, two laws regulating financial life in Iraq in the absence of the federal budget for 2022.
Saleh said in a statement to Earth News, “The financial life in Iraq in the absence of the federal budget for the year 2022 is regulated by two laws, as follows: For the year 2019, the average, which requires spending at a rate of 1/12 of the actual current expenditures achieved in the general budget for the year 2021.”
He added, “The second of them is Law No. 2 of 2022 (the Emergency Law for Food Security and Development), which allocated more than 25 trillion dinars, to cover the rise in prices globally and locally, which weakened the purchasing power of financial allocations related to national food security, especially support for the ration card, which prices of its components increased globally. To more than 40%, in addition to the import prices of oil derivatives, gas and electricity, and other imported and local government purchases, as well as the rise in subsidizing the prices of grain purchased from farmers from 500 thousand dinars per ton of wheat or wheat to more than 700 thousand dinars per ton mentioned.
And Saleh continued, “All these and other paragraphs have increased in prices and are not covered by the exchange rule 12/1 that in the absence of a general budget for the year 20222 and all of them have become restricted to the monetary value of last year’s expenses, which made them urgently need additional allocations and can be called ((compensatory allocations)). Which was estimated by the Emergency Food Security Law at about 25 trillion dinars, and it constitutes an addition to the expenses brought by the Emergency Food Security Law, which was legislated, and its percentage as compensatory or additive allocations amounting to approximately 22% of the actual current expenditures achieved in the 2021 budget.
In light of the large financial abundance currently achieved.”
And he added, “The surplus of the monthly budgets, after covering the total expenditures in the two laws, is recorded in a reserve balance for the benefit of the state.” The accumulated surplus balance will be dealt with in two parts: the first becomes an opening balance for the expenses of the next fiscal year 2023, and the remaining balance can be managed in a sovereign wealth fund, as stipulated in Article 19 of the Federal Financial Management Law referred to above, after providing the legal adaptation for managing the surplus financial transactions that stipulated that Surpluses will be by budget law and not by other laws.”
And Saleh continued, “Nevertheless, the surplus financial reserves are managed by the Central Bank of Iraq in accordance with the best international banking practices in terms of governance in the areas of efficiency, safety and transparency.”