Rising oil prices might end the financial deficit, official says 

Shafaq News/ Muzhar Muhammad Salih, the economic and financial advisor to the Iraqi Prime Minister, Mustafa Al-Kadhimi, commented on the possibility of ending the financial deficit in the 2022 budget after the rise in oil prices.

 Salih told Shafaq News Agency, "The rise in oil and non-oil revenues is the basis for ending the deficit in the upcoming budgets."

"Adherence to the same spending limit in the 2022 budget and similarly to the 2021 budget, with annual average oil prices of no less than $65 per barrel, and doubling non-oil revenues, will lead to reducing the deficit to the limits of the ratio drawn by the effective financial management law, which amounts to about 3  % of Iraq's GDP", he said. 

Salih concluded his speech by saying, "This, by its nature, leads to the realization of the so-called phenomenon of financial consolidation or discipline as a goal of sustainability and financial stability for the country."

 According to preliminary figures in the draft financial budget for next year, the total size of the budget ranges between 120 and 140 trillion dinars, with a deficit of 20 percent.

 The size of the financial budget for the current year, which was approved by Parliament at the end of last March, amounted to 129 trillion dinars, and a deficit of 28 trillion.

 Iraq relies on the revenues from selling crude to cover more than 90% of state expenditures, which has put the country in a stifling financial crisis the year as a result of the decline in oil prices in global markets due to COVID-19.