Iraqi Business Council: Budget deficit threatens salaries, Central Bank delegation to visit Washington soon
Iraqi Business Council: Budget deficit threatens salaries, Central Bank delegation to visit Washington soon
2025/01/29
The head of the Iraqi Business Council, Dawood Abdul Zayer, considered the continued budget deficit a “great danger” to salaries, while revealing an upcoming visit by the Central Bank of Iraq to Washington to discuss important issues.
Abdul Zayer said, during his hosting on the {Free Talk} program broadcast on Al-Furat satellite channel on Tuesday evening, that: “The increase in operating spending since 2019 is due to employment, government and federal obligations, and employee salaries, in addition to the requirements of the political and administrative situation of the state, explaining that “80% of operating spending goes to salaries, while 10% is allocated to sustaining the management of public resources.”
Abdul Zayer pointed out that “corruption is a prominent problem in government spending in general, including operating spending,” stressing that “the fundamental flaw lies in the philosophy of managing the economy in the country, as salaries are supposed to be financed from local revenues.”
He added that “the Prime Minister has diagnosed this flaw; However, Iraq always faces emergency crises that prevent the provision of a suitable climate to transform oil resources into development and investment projects capable of covering part of the operating expenditure.
Abdul Zayar stated that “salaries constitute a major burden on the budget, reaching 8 trillion dinars.”
Regarding financing, Abdul Zayar stressed that “domestic debt is safer and faster compared to external debt, which imposes complex restrictions and conditions on Iraq,” warning that “the continued budget deficit poses a threat to salaries,” noting that “the Central Bank’s reserves represent Iraq’s sovereign fund.”
He touched on “the impact of oil price fluctuations, saying that Iraqi dinar reserves are based on oil reserves, which gives Iraq flexibility to move in the event of a decline in oil prices,” adding that “Iraq’s failure to abide by OPEC’s decisions regarding production reduction may lead to a decline in prices.”
Abdul Zayar revealed “an upcoming visit by the Central Bank of Iraq to Washington to discuss intractable issues, such as the exit of the dollar to sanctioned countries, and foreign trade through American banks to ensure control over the transfer of funds.”
He pointed out that “Starting this year, banks’ accounts will be funded in dollars directly from the central bank, away from the currency auction, and the process will be limited to 5 local banks approved by the US Treasury, most of which are foreign.”
Abdul Zayer concluded by pointing out that “the performance of the central bank so far does not meet aspirations,” stressing that “dependence on crude oil exports will remain a chronic problem unless it is transformed into oil industries that contribute to supporting the national economy.”
alforatnews.iq
