Midyear Review of Budget and Oil Revenues

By Ahmed Mousa Jiyad.

Midyear Review of the State Budget and Oil Export Revenues

The State budget for 2015 was based on an oil export volume of 3.3 million barrels per day (mbd) and a price of $56 a barrel. Accordingly, oil export revenues were estimated to finance 83% of budget revenues.

Despite marked improvement in oil production and exports, data for the first half of this year shows, once again, reality does not coincides with budget’s expectation.

This paper argues that for oil export revenues to reach a budget breakeven the equalizer threshold for Iraq is ca. 4mbd and for KRG it is ca. 800kbd for the entire second half of the year.

Both these equalizer thresholds are, most likely, unattainable under current national and international conditions causing serious budget fiscal deficit, increases uncertainty and economic difficulties in the country.

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