An advisor to the Prime Minister expects a supplementary budget and warns of risks

An advisor to the Prime Minister expects a supplementary budget and warns of risks

04/07/2021 08:59:30

An advisor to the Prime Minister expects a supplementary budget and warns of risksThe financial advisor to the Prime Minister, Mazhar Muhammad Saleh, expected a supplementary budget in 2021.

In a press statement, Saleh said, “The new investment projects that have put their annual allocations into the current year’s budget, despite their limited national business and the expansion of investment opportunities in the country, will constitute one of the basics for the economic growth of thousands of business opportunities in the country.”
He added, “In the event that oil prices continue to recover for a reassuring period of time, additional new investment projects will be approved and, if time permits, a supplementary budget may be approved, to extend this to additional investment projects, and the matter is left to the budget strategy, estimates and financing alternatives.”
Saleh pointed out that, “at the same time, the risks of approving the budget involve two points. The first is that it is a year approaching the legislative elections and with the absence of a general budget whose expenditures constitute approximately 50 percent of the GDP, meaning there is an uncertainty in financial planning that competes with the outcome of the elections. Strong signals of uncertainty for decision-makers in the private sector. ”
He added that “the delay in approving the budget creates an atmosphere of conservatism in the activity of the private sector, which adds severe lethargic effects on economic growth. The second point is that the country is deprived of investment activity and the important operational programs and its effects on the economic movement. Surplus labor in the labor market, in light of growing unemployment rates by more than one decimal place and poverty levels, as well as requiring maximizing the spending cycle and moving economic activity leading to more job opportunities.
On March 31, the House of Representatives approved the federal fiscal budget for 2021, with total expenditures amounting to 129 trillion dinars (about $ 88 billion), while it recorded a deficit of 28 trillion (about $ 19 billion).
Estimated revenues from exporting crude oil were also calculated on the basis of an average price of $ 45 a barrel, and an export rate of 3.250 million barrels per day.
Iraq relies on the revenues from selling crude to cover more than 90 percent of state expenditures, which put the country in a stifling financial crisis last year, as a result of the decline in oil prices in global markets due to the Corona pandemic.
The approval of the budget comes after the lapse of 3 months of the current fiscal year, and it will be applied retroactively over the previous months.

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