The decline in oil prices.. Will the budget be reviewed?
The decline in oil prices.. Will the budget be reviewed?
3-17-2023
Information / Baghdad…
The decline in global oil prices generates a state of confusion in Iraq, as the government relies in preparing the budget on an approximate price of oil over the course of the fiscal year, as well as other expectations related to the fiscal deficit and the mechanism for overcoming it based on the increase in oil prices above the specified price In the budget, however, the matter was different this time after the government set the deficit at around 60 trillion dinars by adopting the price of a barrel at the barrier of $70, at a time when international prices witnessed a decline to less than $80 per barrel, which warns the Iraqi government to reconsider the budget. .
The specialist in economic affairs, Muhammad Attia Al-Saadi, told Al-Maalouma, “The high budget deficit rate is a violation of the financial management law, which set the deficit rate at three percent, while it reaches twenty percent in the draft announced by the government, as the government’s reliance on high prices Oil and increasing production to fill the deficit is an uncalculated adventure that may lead to dire economic consequences in the event of a drop in oil prices, especially since global oil markets are often exposed to stagnation and low demand with the advent of the summer season, which increases financial risks in Iraq.
On the other hand, the economist Dr. Safwan Qusai explained to Al-Maalouma that “increasing interest rates on the dollar led to an increase in its value and a decrease in the price of oil, as it has an inverse relationship with it, as the entry into force of sanctions on Russian oil is matched by a move from Moscow towards Thwarting the European decision to set a ceiling for the price of its oil, as oil prices will witness a rise in the coming days if Russia manages to prevent setting a ceiling for the prices of its oil in the global market,” pointing out that “Russia will not be subject to European sanctions, and OPEC is determined to maintain the same cuts and the same rate.” Therefore, there is no increase in oil pumping, nor is there a decrease. An increase in oil is expected, especially if China succeeds in controlling the Corona pandemic, and therefore oil prices are likely to not fall below $72 a barrel, especially since Washington announced that it will buy oil if it arrives. to this price.”
On the other hand, a member of the Al-Fateh Alliance, Salam Hussein, confirmed to Al-Maalouma that “the budget will not suffer any deficit, especially since Iraq has a large financial surplus and abundant revenues, in addition to the fact that oil prices are high and may reach higher levels than they are at the present time.”
almaalomah.me
