Thursday Morning Iraq Economic News Highlights 3-23-23
Parliamentary Oil: The Price Of Oil In The Budget Is High And Puts The Government In An Awkward Position
Time: 03/23/2023 12:39:33 Read: 715 times {Economic: Al Furat News} The Parliamentary Oil and Gas Committee described setting the price of a barrel of oil in the financial budget at $70 as “embarrassing” for the government. Committee member Ali al-Mashkoor told {Euphrates News} agency, “Determining the price of a barrel of oil in the budget and the drop in international prices, the government bears the matter.” He added, “We do not rule out facing a financial deficit in separate periods of the year, but the possibility of bridging it will be during other months.”
He added, “We see that the price specified in the budget is high and puts the government in embarrassment, especially with its seriousness in implementing the government program that it launched.”
The House of Representatives announced that it had received the draft budget law on March 16.
The Council of Ministers, in its session on March 13, approved the three budgets and referred them to Parliament for approval.
Prime Minister Muhammad Shia al-Sudani said, after the council meeting in a press conference, that: “The total budget is more than 197 trillion dinars, the operational budget is more than 150 trillion dinars, and the investment budget is more than 47 trillion, and the budget deficit is 63 trillion dinars.”
And that “total revenues amount to more than 134 trillion dinars, and oil revenues amount to more than 117 trillion based on the price of oil at 70 dollars, and non-oil revenues amount to more than 17 trillion dinars.” From.. Raghad Dahham LINK
Parliamentarian: The Tripartite Budget Has Not Yet Reached The Parliament Committees
The representative of the State of Law coalition, Muhammad Al-Shammari, confirmed today, Wednesday, that the draft budget law for the next three years has not yet reached the Finance Committee.
Al-Shammari said, in a press interview, which was seen by “Progress,” that “the draft financial budget law for the years 2023, 2024, and 2025 has not reached the Parliamentary Finance Committee yet.”
He added, “The budget reached the Presidency of Parliament, but it did not reach the Finance Committee,” noting that “the time period that it takes to approve it is not known yet.”
Al-Shammari pointed out, “The draft of the state’s general budget law was sent by the government to the House of Representatives, and five days passed, but it has not yet reached the Parliamentary Finance Committee.”
The current budget is considered the highest in the history of Iraq, with a value of up to 200 trillion dinars, at a price of $70 per barrel of oil, while the deficit rate was 63 trillion dinars.
https://takadum-news.com/archives/155717
Parliamentary Finance Sets The Official Date For The Start Of The Marathon Budget Talks
A member of the Parliamentary Finance Committee, Representative Mudar Al-Karawi, confirmed, on Wednesday, that the discussion of the 2023 budget items will start at the beginning of next week.
Al-Karawi said, in a press interview seen by “Takadum”, that “the discussion of the 2023 budget items by the Finance Committee will start next week, pointing out that it will be determined later to host ministers and general managers in order to find out the reasons for the needs and expenditures.”
He added, “The most important endeavor of the Finance Committee is to create a flexible budget that adapts to the country’s conditions and the fluctuations of the global oil market, in a way that does not lead to any large deficit.”
He pointed out that “reducing the fiscal deficit for us is a priority, especially since in the 2023 budget it is the largest after 2003.”
And the House of Representatives announced 3 days ago the arrival of the 2023 budget, pending its referral to the Parliamentary Finance Committee in order to conduct discussions.
https://takadum-news.com/archives/155719
The Continued Rise In The Exchange Rate Of The Dollar…Concern In The Markets And Exhaustion Of The Citizen
The instability of the dollar exchange rate in the parallel market and its rise to more than 150,000 dinars for every 100 dollars made traders anxious despite the great benefit they achieved after entering the electronic platform to buy currency and sell their goods on the basis of the parallel market price, which exhausted the people The citizen who hopes that more effective decisions will be taken through which he will be able to buy what he aspires to easily and without exhausting his financial budget.
A member of the Parliamentary Finance Committee, Representative Faisal Al-Naeli, said in a press interview, which was seen by Taqaddam, that “the government measures taken by the Sudanese government in the face of the dollar crisis were somewhat successful, but the state of stability of the local market is linked to several measures taken by the government, foremost of which is the opening of more banks.”
Currency selling outlets to facilitate the dollar exchange process, as well as putting the hands of the government and security services on the border crossings through which the currency is smuggled.
On the other hand, Professor of Economics at the University of Baghdad, Dr. Safwan Qusay, explained in a press interview seen by “Takadum” that “regulating trade in Iraq needs a unified database so that the system becomes a commercial system through long-term contracts, so that the Ministry of Trade works in This stage involves importing goods and directing consumers towards them,
in addition to the possibility of increasing the transparency of information from the Central Bank so that everyone knows who are the merchants who obtain the dollar at the official rate and import goods, as it is assumed that they will be followed at the parallel market price, pointing out that the bank The Central Bank is keen to expand the circle of dealers in the currency sale window, especially for those who have real bills and real suppliers, and thus the demand for the parallel market will recede.
On a related level, the economist Nabil Jabbar said in a press interview seen by Taqaddam that “the exchange rates of the dollar in the Iraqi markets are still on the rise despite the high indicators of the Iraqi Central Bank’s daily sales of dollars, related to remittances and credits that appear good and growing in a promising way.”
As it increased from an average of 30 million dollars per day to 100 million dollars per day, which is a matter of optimism, but the problem is still related to small merchants who conduct their transfers away from the banking system and away from the (platform) by buying dollars and transferring them through private offices that conduct transfers.
In an illegal way, which caused an increase in the demand for the dollar locally and contributed to its rise, in light of the limited supply practiced by the government and the central bank to stop the phenomenon of dollarization in the local market. https://takadum-news.com/archives/155724
Former Iraqi Minister Of Education: The 3-Year Budget Is A Smart Move
How Iraq’s Tripartite Budget Plan Paves The Way For A More Stable Economic And Political Future
Researcher Shatha Khalil* Last week, the Iraqi Council of Ministers, led by its Prime Minister, Muhammad Shia’a Al-Sudani, approved a draft of the general federal budget bill for a period of three years, making Al-Sudani the first prime minister to present such a project since the American occupation of Iraq until now.
The political and economic debate increased, especially after the challenges faced by the political forces in order to reach an agreement and reach the formation of the Sudanese government, which some considered unacceptable and sparked widespread controversy..
Here we will discuss in this article the economic analysis of this economic law in Iraq.
A government budget is a financial plan that outlines projected government revenues and expenditures for a given period, usually a year. The budget is an essential tool for governments to allocate resources to various sectors of the economy, such as education, healthcare, defense, infrastructure, and social welfare programmes. It also reflects the government’s priorities, goals and policies.
The Iraqi government under al-Sudani chose for the first time to have a multi-year budget to provide greater certainty and stability to the planning process.
Multi-year budgets can help ensure adequate financing for long-term projects and programs and avoid disruptions due to annual budget cycles.
Properly building the state and ensuring stability can be some of the goals that the government aims to achieve through its budget. However, the effectiveness of budgeting in achieving these goals will depend on various factors, such as economic conditions, political climate, and implementation of policies and programs.
A stable budget can bring various benefits to the country, including:
Predictability: A stable budget provides a predictable source of funding for government programs and services, which can enable better planning and implementation of policies and initiatives. This can help create a more stable environment for businesses and individuals, which in turn can support economic growth and development.
Increased Confidence: A stable budget can increase the confidence of investors, both domestic and foreign, in the country’s economic prospects. This can lead to increased investment, which can create jobs and boost economic activity.
Lower Borrowing Costs: A stable budget can help reduce borrowing costs for the government because it shows investors that the country is fiscally responsible and solvent. This can lead to lower interest rates on government bonds, which can save the government money on debt servicing costs.
Credit Rating Improvement: A stable budget can help improve a country’s credit rating, which can have a positive impact on a country’s borrowing costs and overall economic outlook. A higher credit rating can make it easier for the government to borrow money in the international market.
More transparency and accountability: A stable budget can increase transparency and accountability in government spending by providing a clear and predictable source of funding for government programs and services. It can also help ensure that taxpayers’ money is used effectively and efficiently to achieve government priorities and goals.
In conclusion.. In general, a stable budget is an essential component of the economic and social development of a country such as Iraq. It provides the necessary financial resources to support government programs and services and enables better planning and implementation of policies and initiatives. Economic Studies Unit / North America Office
Rawabet Center for Research and Strategic Studies LINK
A Parliamentary Split Over The “Age Of The Budget,” And A Party Objects To Making It For Three Years
Posted On2023-03-23 By Sotaliraq Baghdad / Firas Adnan Representatives talked about a division within Parliament regarding the age of the budget, stressing that the first opinion is with the government’s position to make it for three years, and the other wants it for one year, fearing the large deficit, stressing that the project is still in the office of Parliament Speaker Muhammad al-Halbousi, pointing out that the start of real discussions It will start early next week.
The Council of Ministers had voted on the draft budget law for three years, in the amount of 196 trillion dinars, 150 trillion dinars were allocated to the operational budget, which represents salaries and other necessary expenses, and the deficit amounted to 64 trillion dinars, with real fears of not fulfilling it, and thus will The government resorts to covering it through internal or external borrowing.
Representative Ali Al-Bandawi said, “The budget was expected to arrive during the past month, but due to some procedures, it has been somewhat disrupted.”
Al-Bandawi added, “The copy of the budget sent by the government is still in the office of Parliament Speaker Muhammad al-Halbousi.”
He pointed out, “The budget is awaiting Iraqis, federal institutions and governorates in order to initiate service projects for the citizen.”
Al-Bandawi said, “Expectations indicate that the law will be approved within a month, before the Eid Al-Fitr holiday.”
And he added, “The investment budget amounted to 48 trillion dinars, and it will go to projects in various sectors, whether services, such as building schools, hospitals, electric power projects, and the port of Faw.”
And he stressed, “These amounts are the largest in the history of the budget and come in line with the ministerial platform that the House of Representatives voted on when granting confidence to the government of Muhammad Shia’a al-Sudani.”
Al-Bandawi spoke about “the possibility of an urban renaissance after the approval of the budget,” stressing that “the sums allocated for projects are not sufficient for all that Iraq needs.”
And he stated, “The House of Representatives will exercise its oversight role in following up on the disbursement of the amounts allocated in the budget.”
Al-Bandawi hopes that “the local administrations will play their role in directing the funds to the planned projects, which have direct contact with the Iraqis.”
And he stressed, “The planned deficit in the budget is large, amounting to 64 trillion dinars, so the budget discussions will see all the amounts and move towards reducing this deficit.”[/size]
Al-Bandawi spoke of “Parliament’s keenness for the government to perform its role to the fullest, without the financial accumulations that result from the deficit.”
And he continues, “Parliament will delete any money that it finds unjustified for its existence, in order not to burden the state with new burdens and debts through which it covers the deficit.”
Al-Bandawi noted that “Parliament is divided over the government’s project, which provides for making the budget for three years. The first supports the project on the pretext of not disrupting the implementation of projects, as it happens every year.”
And he goes on, that “public life is suspended, given that we are in the month of March and the budget has not been legislated, and this situation may continue until April and its implementation will be in May, so it is not reasonable that this disruption be repeated every year.”
And Al-Bindawi concluded, that “the second opinion stands against making the budget for more than a year, given the large deficit in it, which can be covered currently through abundance, but what will be the case for the next two years?”
For his part, the other deputy, Jay Taymur, stated, “The Parliamentary Finance Committee has not received, until the present time, the draft budget, and it is still with Al-Halbousi’s office.”
And Timur continued, “Next Saturday, the project will reach the Finance Committee in order to start discussing it, working on it, checking it, and making amendments if necessary.”[/size]
He pointed out, “Parliament wants to pass the law as quickly as possible, but it cannot pass within a period of less than a month.”
Timur noted, “The previous sessions took the budget for two months or more,” adding that “the consensus between the political blocs, especially those aligned within the State Administration Alliance, is one of the factors that will help speed up its passage.”
And he stressed the need for “the specialized committees to stand on all paragraphs and review them, by meeting with ministries and experts to complete the project and end all deficiencies, if any.”
And Timur continues, “Making amendments is harmless, and does not prejudice political agreements, because we want to complete them and in a manner consistent with the public interest.”
And he talked about “court agreements that have taken place, whether within the coalition of state administration or between the federal government and the Kurdistan region, to obtain and pass the law.”
And Timur concluded, “The Kurdistan region has a tendency to support the government of Muhammad Shia’a al-Sudani, through several aspects, the most important of which is the acceleration of the legislation of the budget law.”
In addition, Representative Firas Al-Maslamawi confirmed that “the best thing included in the budget is the provision for the establishment of a development fund.”
Al-Maslamawi added, “The creation of this fund is correct, but we need more details in order for the vision to be clear.”
He explained, “This is done by stating each governorate and the funds it needs to be placed in this fund and the targeted projects.”
Al-Maslamawi spoke about “many projects that should be present in this fund, including sewage networks, bridges, roads, hospitals and schools.”
And he stressed, “The delay in approving the budget in Parliament is not in the interest of any party, and we support the speedy discussion in order to put it to a vote.”
Al-Maslamawi concluded by saying, “The House of Representatives will conduct a comprehensive review of the project in order to know its items and the allocated quantities, and in light of that, it will use its powers, especially in terms of reductions and transfers, leading to voting.” LINK
