Iraqi MoF begins drafting the 2022 budget

Shafaq News/ The Iraqi Finance Minister Ali Allawi announced that the 2022 budget, which the ministry started preparing a few days ago, will contain reform steps.

In statements to a group of journalists, the minister said that the ministry will seek to submit the new budget to Parliament before the elections.

The minister said that the new budget will be hard to pass due to the big deficit in it, as happened in the previous budget.

In the 2021 budget draft, which the government submitted to Parliament, the value of the deficit was estimated at 49 billion dollars. However, the representatives made up the difference by canceling debts and dues from the state, especially Iranian gas and energy dues, in addition to other infrastructure payments.

The value of the deficit in the 2021 budget, as approved by Parliament, amounted to 19.8 billion dollars, compared to 23.1 billion dollars in 2019, knowing that Iraq did not approve the 2020 budget due to political tension.

The total value of revenues in the 2021 budget amounted to about 69.9 billion dollars, calculated based on crude oil exports, with an export rate of 3,250,000 barrels per day.

However, the 2021 budget amounted to $89.7 billion, about 30% lower than the last budget approved in 2019.

The minister revealed that the price of a barrel in the new budget will be 50 dollars, noting that the market price is currently much higher and exceeds sixty dollars.

Iraq, the second-largest oil producer in OPEC, is going through its worst economic crisis. The poverty rate in the country has doubled in 2020 and 40% of the population of 40 million are considered poor according to the World Bank, while the Iraqi dinar has lost 25% of its value.

However, the minister said that Iraq's financial situation improved during the current year due to "the rise in the price of oil and the change in the dinar exchange rate."

Meanwhile, Iraq is negotiating with the International Monetary Fund on a 3 to 4 billion dollars loan, hoping to reach an agreement with the Fund by the end of the year.