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Al-Kazemi’s advisor: The high oil price does not make the budget balanced except on conditions
Shafaq News/ Adviser to the Prime Minister for Financial and Economic Affairs Mazhar Muhammad Salih confirmed on Thursday that the rise in the oil price does not make the budget balanced, except on conditions, indicating that the budget surplus prompted the government not to finance the deficit by borrowing.
Saleh said in an interview with Shafaq News Agency; “The high oil price does not make the budget balanced except on conditions, as the average oil price should be $75 over the course of the fiscal year and not fluctuate, such as dropping to $50 and rising again,” noting that “the budget set the price of a barrel at $45.” And it has a hypothetical deficit, it has spending commitments, and it has oil and non-oil revenues.”
Saleh added, "If the price of a barrel of oil continues at $75 throughout the fiscal year, there will be a balanced budget, provided that there is efficiency in spending and efficiency in non-oil revenues as planned."
Saleh pointed out that "during the first 6 months of this year, the barrel price achieved more than 45 dollars, and at least 62 to 65 dollars the average selling price, and thus achieved a surplus that made the government not finance the deficit by borrowing," noting that "the budget turns from Budgeting a deficit into a balanced budget when the desired expenditures are equal to the desired revenues with the surplus resulting from the rise in oil prices.
On (March 31, 2021), the Iraqi parliament voted on the federal general budget law for the fiscal year 2021 with a deficit of more than 28 trillion dinars, while the revenues of the general budget amounted to more than 101 trillion Iraqi dinars, while expenditures were estimated at 129 trillion dinars.
It is noteworthy that Iraq has entered into a stifling economic crisis since the beginning of the year 2020, as a result of the decline in crude oil prices in global markets due to the Corona pandemic, before oil prices resumed their rise again.
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