Iraq’s financial revenues exceed 106 trillion dinars within 10 months, and an expert comments

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On Monday, the Ministry of Finance announced that the Iraqi Federal Reserve’s revenues in the budget surpassed 106 trillion dinars in ten months. It was confirmed that oil contributed to 95% of the budget, highlighting the country’s heavy reliance on oil in its general budget. An economist cautioned that this trend may continue in the future.

She referred to the data and tables released by the Ministry of Finance in December. The ten-month accounts for the current fiscal year indicate that oil remains the primary resource for Iraq’s general budget, contributing 95%. This suggests that the country’s general budget is based on a rentier economy.

She pointed out that the financial tables show a total revenue of 106 trillion, 843 billion, 96 million, and 310 thousand and 311 dinars until last October, after excluding transfer revenues of 1 trillion, 676 billion, 486 million, 640 thousand dinars. Additionally, the total expenditures with advances added up to 84 trillion, 454 billion, 214 million, and 761 thousand dinars.

As per the financial tables, the revenue generated from oil amounted to 101 trillion, 940 billion and 1 million and 380 thousand dinars, which makes up 95% of the overall budget. On the other hand, the non-oil revenue was only 5 trillion, 477 billion, 559 million and 979 thousand dinars.

In an interview with Shafaq News Agency, economic expert Muhammad Al-Hassani warned about the continuation of Iraq’s reliance on oil as its sole source of revenue, considering that oil prices are subject to global fluctuations.

He pointed out that the fall in oil prices from $90 to $70 per barrel affected Iraq’s general budget.

He stated that Iraq was unable to develop other economic sectors despite their financial savings. He noted that these savings were used for operational expenses without any investment.

In an interview with , Mazhar Mohamed Saleh, who served as Adviser to the Prime Minister on Finance, confirmed in March 2021 that the Iraqi economy has remained rentier due to several factors. He cited wars, economic blockades imposed on Iraq in the past, and political conflicts that led to the dispersion of economic resources as the main reasons for this.

The Iraqi state heavily relies on oil as the sole source of its general budget. This puts Iraq in danger of being affected by global crises that occur from time to time, as oil prices are also affected. Therefore, the country is forced to borrow from foreign or domestic sources to cover the deficit. This indicates an inability to effectively manage state funds and find alternative financing solutions.