Iraq’s financial revenues from selling crude oil on global markets could be negatively impacted by the fall in oil prices, according to an expert in economics.
“The drop in oil prices certainly affects the increase in the budget deficit, as well as it affects the availability of cash liquidity for the Ministry of Finance,” Salah Nouri stated.
“The Ministry of Finance prioritizes their disbursement, through internal borrowing from government banks and issuing debt bonds, although this also affects the financial liquidity of banks,” he added. “Due to the sensitivity of the situation of employees’ salaries,” he continued.
“Reducing spending on investment projects, which affects the construction of infrastructure and the level of employment of workers in the private sector,” he said, was one of the financial options.
Nouri was of the opinion that “salaries are diverse and constitute a high percentage of the operating budget, namely salaries of employees in the public service, salaries of retired civilians and military personnel, salaries of political prisoners and detainees, as well as salaries of detainees (Rafha), which represents the largest percentage of the remaining categories according to its law, since it includes all family members and not just the head of the family, in addition to salaries of martyrs’ families, as well as salaries of martyr
Even though OPEC+ postponed a planned increase in output by two months, oil prices were on track for their biggest weekly loss in nearly a year on Friday due to persistent concerns about ample supply and weak demand.
West Texas Intermediate crude was close to $69. Brent crude rose to around $73 a barrel on Friday, but was down nearly 8% for the week.
Although the alliance’s plan to restore 2.2 million barrels per day over the course of a year remains in place, OPEC stated in a statement that the alliance would not increase output by 180,000 barrels per day in October and November.
Just to cover operating costs (salaries), Iraq needs 64 trillion dinars ($48 billion) annually.
Since the beginning of July, oil prices have been trending lower due to worries about demand from major consumers, particularly China, and indications of rising supply from countries outside the Organization of Petroleum Exporting Countries.
