Sunday Morning Iraq Economic News Highlights 3-19-23
Oil Prices, The Deficit And The Kurds… The Budget Is Still Hovering In The Corridors Of Parliament
Information / Baghdad… The decline in global oil prices and the deficit, which exceeded 60 trillion dinars in the budget, represent the most important obstacles that stand in the way of approving the budget, at a time when the people are waiting for a vote on it by the House of Representatives, as it is still oscillating in its corridors amid fears of price fluctuation and its decline to lower levels,
as the parties are still The parliament confirms that there is a need to study the budget and settle the share of the Kurds and ensure that they do not object to the percentage specified for them in the budget, despite the fact that the Prime Minister settled matters during his visit to Erbil and the matter was confirmed by members of the State Administration Coalition.
The representative of the Kurdistan Democratic Party, Sharif Suleiman, told Al-Maalouma that “most of the outstanding problems between Baghdad and Erbil occurred due to the failure to approve the oil and gas law, which would solve many problems related to the oil file, as the region aspires to more understandings with the government, especially since Kurdistan has signed a document of direct dealings between the governments of the center and the region to end all obstacles facing the political process between the two sides,
in addition to that there is optimism about the relations between Baghdad and Erbil, especially in the budget file, which will be applied properly in the event that all parties adhere to its provisions and the constitution to overcome any obstacles that stand. between the center and the region.
On a related note, former MP Jassim Muhammad Jaafar ruled out, during his interview with Al-Malooma, that “the Kurds will boycott the parliament sessions in protest against the failure to increase the region’s share in the budget,” pointing out that the Kurds will not repeat the ball, as the budget will pass with their acceptance or boycott of parliament. “.
On the other hand, economic expert Abd al-Rahman al-Mashhadani told Al-Maalouma that “the budget deficit occurred as a result of the exaggeration of some important figures that were set, as the continued decline in global oil prices will put the government in front of the problem of lack of financing, which will be the investment aspect.”
From the budget, it is the victim for the sake of the operational side, similar to previous years,” pointing out that “fixing the price of a barrel of oil at 60 dollars will be better in all respects in relation to the budget, and therefore one of the reasons for the delay in approving the general budget is the fluctuation of global oil prices and a review of the numbers The task of the general budget before voting on it inside the dome of Parliament.
And in a legal context, as expert Ali Al-Tamimi explained to Al-Maalouma, “any additions to the increase in the general budget law from Parliament must be accompanied by the approval of the government and the Council of Ministers in accordance with Article 62 of the Constitution, and unlike it, the law is subject to appeal before the Federal Court, and Parliament has the right to transfer And the reduction between the chapters of the budget law,”
stressing that “the percentage of deficit in the budget stipulated in Article 6 of the Financial Management Law for the year 2019 has confirmed that the deficit does not exceed 3 percent for the planning budget, at a time when the budget law is considered an amended law,
and as a result, the deficit percentage If it is low or high, then this is considered an amendment to what was stipulated in the financial management law, and as a result, the budget law is applied, and the deficit percentage is not considered a violation of the aforementioned law. LINK
Iraq Increases Its Holdings Of US Treasury Bonds
2023-03-19 01:42 Shafaq News/ The US Treasury announced, on Sunday, that Iraq ranks two among the largest foreign holders of US Treasury bonds.
The treasury said in its latest table, seen by Shafaq News agency, that “Iraq rose two ranks to reach the 29th rank among the countries with the largest holders of US treasury bonds, of the 38 countries listed in the table for countries with possessions of more than 32 billion dollars.”
And she added, “Iraq’s possession of these bonds amounted to $41.2 billion for the month of January 2022, up by 0.4 percent from December of 2022, and up by 76.07 percent from January 2022.”
She indicated that “Iraq was the fourth largest Arab country after Saudi Arabia, Kuwait and the UAE, while Japan came on top of the countries with the largest possession of these bonds with 1 trillion and 104 billion dollars, followed by China secondly with 859 billion dollars, the United Kingdom third with 668 billion dollars, and Belgium fourth with 331 billion dollars, and Luxembourg fifth with 318 billion dollars, “indicating that the total bonds of the countries of the world for the month of January rose 80 billion dollars from last December, to reach 7 trillion and 402 billion dollars.” LINK
A Slight Decrease In Dollar Prices In Baghdad And Erbil
2023-03-19 02:10 Shafaq News/ The exchange rates of the US dollar against the Iraqi dinar decreased slightly today, Sunday, in the main stock exchange in the capital, Baghdad, and in the Kurdistan Region.
Shafaq News agency reporter said that the Al-Kifah and Al-Harithiya Central Stock Exchange in Baghdad recorded 156,300 Iraqi dinars for 100 US dollars this morning.
While the prices on Saturday morning were 156,400 dinars for 100 dollars.
Our correspondent indicated that the buying and selling prices decreased in the exchange shops in the local markets in Baghdad, as the selling price reached 157,250 Iraqi dinars per 100 US dollars, while the buying prices amounted to 155,250 Iraqi dinars per 100 US dollars.
In Erbil, the capital of the Kurdistan Region, the stock market recorded a decrease, as the selling price of the dollar reached 156,650 dinars per 100 US dollars, and the buying price reached 155,650 dinars per 100 US dollars. LINK
The Decline In Oil Prices Threatens The New Budget, And A Government Advisor Talks About The Exacerbation Of The Deficit
Baghdad-Iraq today: On Saturday, the financial advisor to the Prime Minister, Mazhar Muhammad Salih, identified two main reasons for the decline in global oil prices, while stressing that the decline in oil prices may raise the budget deficit to record levels.
Saleh said, in a statement, that “the indicators of oil markets in the world show that the cycle of oil assets is heading towards a decline, causing semi-deflationary price effects under two influences. Economic growth and a contraction in aggregate demand, especially in the energy-importing and energy-consuming Western economies, which affects the growth of demand for crude oil in the energy markets.
He added, “The second effect comes in that the Russian Federation, as a party to the war with the West, has started marketing its oil to the markets of India, China and Asia at $20 less than global oil prices, which is a pattern of an undeclared price war.”
He pointed out, “The two factors constitute signs of an oil gluten that may lead to a return of oil prices in the current year to an average between 60-65 dollars a barrel, which may prompt the Organization of Petroleum Exporting Countries or the ( OPEC Plus) group to maintain the stability of their countries’ budgets by reducing some of the production according to the “as of the members”, but the OPEC Plus decision may contradict the hypothetical ceiling for oil prices adopted by the Western agreements from the parties to the war in Ukraine and the energy consumers, specifically (NATO countries), which implicitly want to load part of the war bill on the shoulders of the oil-exporting countries and devour their surpluses of oil revenues.
Regarding the possibility of a decrease in oil prices and its impact on the public budget, Saleh stressed that “the draft federal budget law for the year 2023, which was approved by the Council of Ministers in the past few days, and was submitted for legislation to the House of Representatives, which approved the price of a barrel of oil of $70 in order to evaluate oil revenues in the aforementioned budget, the possibility of oil prices falling below $70 per barrel of Iraqi oil is exported, which will inevitably expand the planned Deficit bill in the federal general budget, which is currently estimated at about 63 trillion dinars, and may raise the deficit to other record rates, adding between 8-16.
One trillion dinars to the aforementioned deficit balance in the event that expenditures remain on their current estimated status,Especially when the average price of a barrel of exported oil reaches between 60-65 dollars per barrel.
And Saleh continued, “The entire draft budget has become before the table of the House of Representatives, whose duties are to consider expenditures in light of the expected revenues before legislation,” noting that “if the general budget law is legislated as approved by the Council of Ministers, the executive authority will face possible possibilities.” The cycle of oil assets by itself, but in a way that preserves the goals of the government program in protecting and stabilizing the standard of living, without compromising the principle of tightening financial discipline and building spending priorities with high precision. LINK
Mazhar Saleh: There Are No Concerns About The “Triple” Budget, And It May Change
Economical 2023/03/19 On Saturday, the financial advisor to the Prime Minister, Mazhar Muhammad Salih, reduced fears of approving 3-year budgets, due to the instability of dollar prices and fears that they would not meet the basic entitlements of the state and the citizen in the joints of life.
Saleh said, “The presentation of a federal general budget for three years is a (financial plan) that came in accordance with the Federal Financial Management Law, as Article 4/Second of the Federal Financial Management Law permitted the executive authority to present a picture of a (cascading) budget for three years presented once, on The budget for the first year should be legislated and approved for implementation inevitably.
He stressed that “the budgets of the two subsequent years after their legislation are subject to change and amendment by the executive authority, provided that the House of Representatives approves the amendments required by the circumstances of the amendment at the time, depending on the financial and economic situation of the country.”
Saleh added, “The executive authority sought, behind this, to give sufficient flexibility to avoid problems that impede the approval of the budget in the coming years, whether what happened in caretaker governments, for example, or other legislative obstacles, in addition to following the so-called (budget transparency), which is Giving a future vision of the priorities of the country’s financial situation in the medium term and in accordance with the implementation of the principles of the government program for the coming years.
And he indicated that “(the annual general budget) came clear and explicit in the text of Article 1/Second of the Federal Financial Management Law in force No. 6 of 2019 as amended, and it is a (obligatory) year, also beginning as stated in the provisions of the above law as a fiscal year starting on 1/1 of each fiscal year ending on 31/12 of the same fiscal year.
The Iraqi debate continues regarding the Iraqi government’s approval of the country’s financial budget for a period of 3 years, which is happening for the first time since 2003, as previous governments used to prepare the budget for a period of one year and send it to Parliament to take its path to implementation after its approval.
Although the “triple” budget still needs to be approved in parliament, the debate is divided between two main directions. The first represents the government and its political parties and blocs, while the other represents economic trends that it believes are risky and are not consistent with the budget law and the context of rents on which the Iraqi economy is based.
And Prime Minister Muhammad al-Sudani said, the day after the budget was approved by the Council of Ministers, last Monday: “The budget for the years 2023, 2024, and 2025 has been approved, and this is the first budget prepared by the government, and it received enough time for research and discussion, in a way that guarantees the implementation of the government program.”
Al-Sudani believed that approving a three-year budget is “a bold step that is calculated for this government, and its importance lies in supporting financial stability, as ministries usually enter a stage of hibernation at the end and beginning of the year until Approval of the budget. https://alsabaah.iq/73584-.html
State Of Law: Everyone Agrees On “St. Lego” And There Are No Obstacles To Passing It Today
Information / Baghdad.. On Sunday, the representative of the State of Law Coalition, Hussein Mardan, confirmed that the independent parliamentary forces could not obstruct the political consensus regarding passing the local elections law during today’s session, indicating that most of the forces agree to pass the law according to the St. Lego system.
Mardan said in a statement, followed by Al-Maalouma, that “the independent forces have the opportunity to enter with a unified list to run in the provincial elections, and no deputy can impose his conviction on the majority in the House of Representatives.”
He added, “We support the provincial elections law with an electoral denominator 1.9, and the law will pass in today’s session, Sunday,” stressing that “the coalition deputies have an objection regarding the ‘quota’ seats in the election law.”
He pointed out that “there is no increase in minority seats in the new law, and that the multi-district law dispersed the districts and sub-districts.” LINK
