The government's financial advisor to / Nina /: The rise in oil prices will cover the fiscal budget deficit

Wednesday 27 October 2021 09:15
 
Baghdad / NINA / - The expert government financial advisor, Mazhar Muhammad Salih, confirmed that the rise in oil prices will contribute to covering the current budget deficit of 29 trillion dinars at a rate of 100%, provided that the planned non-oil revenues achieve a rate of approximately 90-100%, not 30%, as is expected. Her, to widen the fiscal deficit gap in the general budget.

Muhammad Salih said in a statement to the National Iraqi News Agency / NINA/ That "although monetary policy has moved from the stage of challenges that accompanied the economic depression in the country to the stage of détente and the search for opportunities, which were confirmed by two things: the first: the increase in the foreign currency reserves of the Central Bank of Iraq by 12 billion dollars during the current fiscal year 2021, and secondly, financing The deficit of the federal general budget from the influx of cash revenues accumulated by the financial buffer as a result of the growing oil price differences from 45 dollars in calculating oil revenues in the budget to 80 dollars currently and an annual average of not less than 65 dollars, which covers the current budget deficit of 29 trillion dinars at a rate of 100%, provided that The planned non-oil revenues (also) achieve a ratio of approximately 90-100%, not 30%, as is expected, to widen the fiscal deficit gap in the general budget.

He added: However, there are two other things that still represent the concern of the difficult Iraqi economic equation, which is the humility of the expected annual economic growth to (positive 1%), which is less than the population growth rate of 2.6%, which indicates the continued high levels of unemployment among young people by about 23%, in addition to the increasing levels of poverty that still take from the prosperity of life for about 40% of the country’s population, accompanied by creeping annual inflation that increased from 1% at the beginning of this year to rise to about 9.5-10% annually.

The government advisor stressed the need to exercise monetary policy with its available tools to address expected inflation and the problems of fluctuation in the stability of the real sector in the issues of growth and unemployment and how the central bank uses the exchange rate tool as a nominal stabilizer to reach a equilibrium exchange rate that targets imported inflation and leads to an improvement in the value of the Iraqi dinar purchasing through Reducing the increases in the degree of growth of inflation rates through the framework of a gradual policy, meaning a decrease in the incremental increases in price growth./ End 8

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