The government is moving to austerity after rising oil prices

The government is moving to austerity after rising oil prices

Journal  May 8, 2017



Baghdad - Journal News
The Ministry of Finance announced that the rise in oil prices requires a rise in the level of government spending.

An economic analyst described the new government procedure as follows: Saudi Arabia's return of financial allowances to civil and military employees after a better-than-expected budget deficit was announced, ending a wave of salary cuts due to lower oil prices and falling stock prices. Money market.

The Minister of Finance and Agency Abdul Razzaq al-Issa on the sidelines of the discussion of the federal budget strategy of the state in the presence of representatives of ministries and a number of members of the House of Representatives, "The ministry discussed the federal budget strategy of the state in the presence of representatives of ministries and a number of members of the House of Representatives," noting that " To begin drawing the features of the federal budget in light of the economic and financial potential of the state.

He added that "the adoption of oil alone is a source of messages and indicators is not reassuring in economic terms," ​​stressing that "high oil prices require a rise in the level of government spending."

"Coordination with the international financial organizations in this area has set important steps in the process of modernizing the financial systems that impose a complete transformation to the electronic electronic system of advanced financial system to reach a high level of transparency that ensures the containment of the effects of corruption in the joints responsible for the economic and financial file of the country "He said.

He urged Al-Issa, the ministries of the State and all its institutions to "arrange the map of their expenses in accordance with the urgent need and control of revenue to achieve sufficient treatment of any proportion of the deficit may affect the federal budget."

In turn, the economic analyst, Salem Al-Shami, said in an interview with the "Journal News" that "the rise in oil prices must be reflected positively on the expansion of government expenditures, and led to lower prices to reduce expenses," noting that "oil countries similar to the conditions of Iraq working Thus, King Salman issued a decree in which he returned all allowances and rewards in response to the removal of the state of distress and discontent that hit the Saudi street. "

The Ministry of Oil, the total quantities exported crude oil and revenues achieved for the month of April, according to preliminary statistics from the Iraqi oil marketing company "Sumo", where the amount of exports (97) million and (574) thousand and (813) barrels (ninety-seven million And five hundred and seventy-four thousand and eight hundred and thirteen barrels) revenues amounted to more than (4) billion and (612) million (815) thousand dollars (four billion six hundred and twelve million and eight hundred and fifteen thousand dollars).

The spokesman for the Ministry of Oil Assem Jihad that the total quantities exported crude oil for the month of April from the oil fields in central and southern Iraq amounted to (96) million and (900) thousand (433) barrels were exported from the southern ports and monolithic buoys, while the total Exports of Kirkuk oil (674) thousand (380) barrel. Jihad continued that the daily export rate amounted to (3) million and (252) thousand barrels. Jihad added that the average price per barrel reached (47,275) dollars. It is noteworthy that the ministry and through its belief in informing the people of the export operations and revenues from it took this monthly action.

A report by Capital said that oil will remain the main driver of regional stock markets' performance over the coming period, with current oil price movements likely to reflect increased investment caution and weak trading volume.
The price of oil for the time this year to $ 50, fell to $ 46.69 a barrel; because of concerns about oversupply, but the announcement of Saudi Arabia's willingness to join OPEC to extend the production cut pushed oil prices to rebound again to $ 49.10 per barrel, France's new president, Emmanuel Macaron, and political news were the main drivers of global and regional performance last week.

The decline in oil prices has affected significantly in the federal budget of Iraq for the past and current year, prompting the government to reduce its public expenditure significantly.

Iraq, in cooperation with representatives of the World Bank in Baghdad, launched a project to reform and modernize the financial management systems of the state. The Ministry of Finance announced this during a meeting with representatives of the World Bank headed by the Special Representative of the Bank Robert Boouda and his accompanying delegation. Representatives of the World Bank during the spring meetings held recently in Washington, noting that the project includes the main axes, including the direction of the integrated system of financial management information and computerization of the operations of public financial management of the preparation and implementation of the budget in the Ministry of Finance and other ministries And all exchange units. He added that one of the priorities of the project is to develop the government investment of the Iraqi state.

For their part, the representatives of the World Bank expressed readiness to cooperate and support Iraq and develop its financial mechanisms as a founding member and contribute to the World Bank.

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