It is likely that next year's budget will witness more investment projects. The appearance of Saleh: Reducing the hypothetical deficit due to the increase in revenues.
Thursday 09 September 2021 174
Baghdad: Haider Falih Al-Rubaie
The financial advisor in the Prime Minister, Dr. Mazhar Muhammad Salih, suggested that the next year’s budget 2022 will witness more new investment projects, which will be guaranteed to be implemented as a result of the increase in oil revenues. The price of black gold rose to exceed $70 a barrel, which economists rely on a lot to bridge the deficit gap in the public budget, which was built on the basis of a barrel price of $45.
Saleh stressed, during his speech to Al-Sabah, that "reducing the hypothetical deficit due to the increase in oil revenues in the federal general budget for the year 2022 will exceed important percentages of financing that deficit by means of traditional borrowing from local or international financing institutions to secure the needs of implementing new investment projects."
And the government advisor indicated that this matter will be done through two parts, the first is the additional funding and filling the deficit due to the improvement in the price of a barrel of oil, at five dollars above the price of a barrel approved by the 2021 budget, which will be mostly $ 50 instead of $ 45.
Saleh explained, “The second part relates to the cycle of oil assets, which still indicates an improvement in global oil prices, with an annual average expected to exceed $65 a barrel in 2022, with the growing détente of the global economy and the increasing levels of vaccination against the Corona pandemic and the return of its trade and investment entanglements and prosperity All forms of transportation sectors, indicating that the transportation sector is responsible for consuming 75% of oil derivatives in the world.
The financial advisor believes, “The list of new investment projects will be guaranteed to be implemented, and according to the flow of additional revenues in the general budget, which will cover the hypothetical deficit in the 2022 budget without having to resort to domestic or external borrowing, which helps to provide strength to the state of financial consolidation that is looking forward to to public finances in providing means of its sustainability.
A spokesman for the Ministry of Oil, Assem Jihad, told the Iraqi News Agency (INA) that “the stability of oil prices at $70, despite the great challenges and the economic stagnation of many countries’ economies, is a good indicator for the member states of “OPEC +”, including Iraq, because it enhances their its fiscal revenues, revives their economies, and reduces the proportion of the fiscal deficit.”
Jihad indicated, "The stability of financial revenues for Iraq between 65 and 70 dollars during the past months is a good realistic indicator in light of the challenges facing the economies of countries and the (fragile) reality of the oil market," noting that "Iraq aspires to achieve higher revenues through commitment." With the gradual increases that were agreed upon in “OPEC +”, which contribute to reducing the proportion of the budget deficit.”