The World Bank talks about Iraq's budget for 2020: "an accident financing gap" and oil will not work .. This is the expected deficit ratio!

[Mary B]

The World Bank talks about Iraq's budget for 2020: "an accident financing gap" and oil will not work .. This is the expected deficit ratio!

2020-09-08

Yes Iraq - Baghdad

The World Bank spoke, in a report on Iraq and the 2020 budget, which it intends to approve these days, stressing that it will face a severe financing deficit that may reach 19 percent.

The bank said in a report, that in light of the lack of programmed measures to control public finances, it is expected that the budget deficit will jump to 19% of GDP by the end of 2020, indicating that as a result, the Iraqi government will likely face a severe financing gap that will not be limited. Its results include not only postponing the implementation of vital infrastructure projects in the service provision sectors, but also postponing the implementation of human capital building programs, and it will also limit the government's ability to meet the needs of economic recovery in the aftermath of the coronavirus pandemic.

And the bank continued, saying: Iraq has not yet been able to approve the annual budget despite the year’s arrival in the last quarter, as the political conditions of Iraq and the collapse of oil prices have affected 95% of the annual government spending, in addition to the repercussions The Corona epidemic and its effects on the global economy in general and on Iraq's economic performance in particular.

He explained: that the deficit in the Iraqi budget for the end of 2019 amounted to about 45 billion US dollars, which government agencies described as a deficit that cannot be covered, noting that the budget deficit in economic terms means restricting government spending to the maximum possible extent, which successive Iraqi governments have failed to do in light of The chaos of laws, overlapping powers, and the absence of censorship.

He added: The expansion of government spending on salaries is the biggest burden that has always weighed on the budget, as the final value of employee salaries is about 48 billion dollars per year, and high oil prices were responsible for the task of filling the deficit. And rooted in the structure of the rentier economy and the necessity to transform it into an open market mode, encourage the private sector, stimulate industry and foreign investment.

The bank's report detailed that, in the normal economy, the revenues of the general budgets come from direct taxes on wealth, profits and wages. Fees for licensing, transfer of ownership and sovereign services; And indirect taxes levied on various forms of income disposal, including on imports and sales, such as value added taxes.

He pointed out that the budget deficit is a difference between government spending and revenues, indicating that the fiscal deficit in Iraq is always associated with the deficit of the balance of payments, but until today, oil prices control the budget deficit in Iraq.

Oil revenues are almost the only source for financing Iraq's governmental and private imports of goods, services and foreign payments, and the Iraqi budget deficit is 48 trillion dinars (40 billion dollars), of which three trillion dinars (2.5 billion dollars) are to implement the projects agreed upon with China. Trillion

And the bank stated that Iraq had previously gone through a state of budget deficit in the 2009 budget and in the 2014 budget, adding that the Iraqi government borrowed 27 internal and external loans in 2019 to cover the budget deficit of approximately $ 23.3 billion.

Oil revenues for the budget are estimated at about $ 79 billion, as these figures are based on the average price of a barrel of oil at $ 56 and an export rate of 3.8 million barrels per day, while non-oil revenues are estimated at about $ 10 billion.

https://yesiraq.com/البنك-الدولي-يتحدث-عن-موازنة-العراق-لـ-2/

[Flamtap]

Talk about getting a "whoopin" by Big Daddy! 🤣