drop in oil prices would disrupt next year’s budget
showed a number of specialists in the economic fears of the possibility of lower oil prices globally, which can lead to confusion of Iraq’s budget for next year, which was built on the basis of calculating the price of $ 90 a barrel, which would cause, according to the views of specialists to increase the budget deficit, and therefore having to reduce the total capital expenditures and operating, or borrowing, as happened during the global financial crisis in 2008, and whilst reducing the Ministry of Finance of the risks it mentioned that he came after increasing public expenditure of the state, expressed Monetary Fund and the World Bank their reservations on the process of calculating the value of a barrel of oil in the next budget, especially with the foggy scene production and export of Petroleum Iraqi could drop due to a variety of factors affecting it, particularly the security factor.
and Council of Ministers approved at its forty-sixth regular, the draft federal budget law for next year 2013 amount (138) trillion dinars, an increase of 18 percent for the current year. came in the project that the total federal income amounted to (119.3) trillion dinars have been achieved as a result of calculation of income from export of crude oil at an average price (90) dollars per barrel and export capacity of up to ( 2.9) million barrels per day, including the quantity produced and exported from the territory of Kurdistan and the (250) thousand barrels per day. reached the investment budget (55) trillion dinars and the operating budget (83) trillion dinars distributed among the institutions and ministries and state bodies all will be distribution of public expenditure according to the rates population after excluding allocations Center Federal Ministry and sovereign expenditure.
recalls specialists what Iraq has passed through in 2008 during the global crisis that hit the economies of countries and led to the erosion of oil prices, as the price of a barrel of oil is less than $ 30 after rising to more than 100 at the time , which called for existing on the economic reality in the country to reduce capital expenditures and operating after increasing fiscal deficit in the budget, and this scene, according to economic researcher raised Hassan verifiable under the data prior warning of economic crises similar, suggesting what was going through the euro zone challenges said it can affect oil prices globally.
Despite the many factors that can lead by Hassan toppled oil prices, but he expressed his fear of other risks are declining oil production and export to Iraq and thus get a budget deficit, and the researcher believes that something like this exists, especially in the case of fluctuation of the security or some technical challenges that accompany the work, suggesting at the same time calculate the price (average) of the value of a barrel of oil, for fear of crises that confirmed it (are happening under the international changes and challenges global could affect the national economy). turn He expressed the former oil minister, Dr. Ibrahim Bahr al-Ulum reservation on the process of calculating the price of oil in the budget that country for the next year, a proposal to keep the (price) at the borders of what has been calculated in the current year budget is $ 85, expected during his speech for the (morning) the stability of oil prices globally in the first quarter of next year, but he said that this stability will remain fragile with increasing challenges and international disturbances and problems the euro zone.
stressed Sea Alom the need to be there vision in (planning Almoisnati) to ward off the dangers that can be exposed to the country, pointing out that Some Gulf countries, and despite witnessing stability and clear, kept the price of oil at $ 65 in the calculation of their budgets Financial, which demonstrates hedging those countries the possibility of a financial crises and global economic.
confirms the former minister said that oil prices do not depend on fundamentals (demand and width), but is subject to vibration with the growing international disturbances, and therefore oil prices in light of that equation will be subject to increase or decrease, despite fears Uloum of calculating price of a barrel of oil in the budget next year, but he expected to see world oil markets stable even end the first quarter of next year.
As announced parliamentary Finance Committee for reservation IMF on the price per barrel of oil in Iraq’s budget for next year, reduced the Ministry of Finance of the importance of reservation Monetary Fund and the World Bank to raise the price of a barrel of oil in the federal budget, indicating that the addition of five dollars on the price of a barrel came as a result of increased expenditures in the budget.
said Undersecretary Fadel Prophet “It was agreed in the preparation of strategic budget for 2013 between Iraq and the IMF and the World Bank to be the price per barrel of $ 85, especially after the emergence of objections to raise the price of a barrel to $ 90, is that the budget next year rose value and estimated amounts for the expenses increased is the other, which called for the Council of Ministers calculate the price of a barrel of $ 90 instead of $ 85. turn confirmed member of the Finance Committee MP Najiba Najib said that “the International Monetary Fund had a reservation on the price of a barrel oil per budget in 2013. ” and attributed Najib disagreement with the price per barrel for “fear of falling oil prices in the global markets, especially that Iraq depends on oil revenues by 93 percent in support of its economy, project finance and financial budgets,” describing those fears to ” realism, not just perceptions and speculation. “
and saw Najib said “the price per barrel in the budget next year (optimistic), despite an increase in oil prices,” afterthought (he was supposed to be price Evaluator barrel Bearish and not Bullish) to meet any potential drop in prices worldwide and the possibility of the impact on the revenues of the country.