Iraqi Cabinet Ramps Up Spending as Oil Prices Rise

Iraq’s government submitted a revised draft budget to MPs for approval on Sunday, raising projected public spending as oil prices have increased, government spokesman Ali al-Dabbagh said.

The new spending programme estimates overall expenditure at $81.86 billion, or 96.6 trillion Iraqi dinars, while income will be $68.56 billion, leaving a shortfall of $13.3 billion– about a 16 percent budget deficit.

Sunday’s submission is based on average oil prices of $76.5 per barrel and projected exports of 2.2 million barrels of oil per day (bpd), a figure which includes 100,000 bpd of exports from the autonomous Kurdish region.

A previous draft budget, sent to parliament on December 1, estimated spending of $78.8 billion based on oil prices of $73 per barrel.

Of the overall spending in the new budget, $56.44 billion will be operating expenses — primarily salaries and pensions for civil servants – and the remaining $25.42 billion will be dedicated to investment, Dabbagh said.

Energy sales are expected to account for 90 percent of revenues.

Dabbagh said the $13.3 billion deficit would be covered by “money accumulated from past surpluses and from internal and external loans.”

He added that the cabinet also gave the green light for the finance ministry to request a $4.5 billion loan from the International Monetary Fund, and a further $2 billion from the World Bank.

While Iraq’s projected oil price currently looks to be a conservative estimate — prices currently stand at around $89 in New York — its projected exports are more ambitious.

Iraq has not exported 2.2 million barrels per day of oil since the 2003 US-led invasion ousted dictator Saddam Hussein.

The country currently produces around 2.5 million bpd, with exports averaging around two million bpd, though the former figure is expected to rise to three million bpd by the end of the year, according to the oil ministry.

(Source: Zawya)

19 Responses to Iraqi Cabinet Ramps Up Spending as Oil Prices Rise

  1. Frederick Johnson 10th February 2011 at 12:22 #

    The increasing oil production in Iraq is an international concern,inwhich should prove worthy of itself in time.Hopefully sooner,moreso than later.

  2. John Doe 10th February 2011 at 13:09 #

    Does this mean it will push them closer to an RV. We can all hope so…..

    GO RV!!!!!!!!!

  3. Ty 12th February 2011 at 05:05 #

    How can they request a $4.5 billion loan from the IMF if the IMF does not recognize the iraqi dinar?!

  4. ron157us 12th February 2011 at 09:10 #

    Should I buy some dinars?

  5. junior 12th February 2011 at 13:09 #

    those this mean that they are going to revalue the dinars?

  6. Frederick Johnson 14th February 2011 at 04:24 #

    When will someone enhance or enlighten the replies,i resdily await that.Thank you.

  7. Frederick Johnson 14th February 2011 at 04:31 #

    Disregard that last comment,due to an error in spelling.

  8. junior 15th February 2011 at 00:49 #

    is the rv the dinars a big scam ???????????????????

  9. veera 15th February 2011 at 10:12 #

    Can I Get Soon revalue iraqi dinars?.

  10. mark 15th February 2011 at 12:02 #

    Junior, If you are looking to purchas Iraqi Dinar do so at our owne risk. If you want to reduce your risk Buy it from a big bank Back in the states, That way you will not have to pay for any fee’s and you can get it for about $840.00 on the million. If the RV dose not happen you can turn the money back in to the Back and you have lost nothing. Here is another word to the wise Junior get the bills in small bills like Hundreds not 25000 doller bills.

  11. GM 15th February 2011 at 16:01 #

    I hope not…something has to give..people have to eat & live…go RV.

  12. junior 15th February 2011 at 18:45 #

    whats happening to the RV of the dinars?

  13. […] debts and finance current and new projects. The sum amounts to nearly 10 percent of the country’s budget, reports […]

  14. mark 16th February 2011 at 10:03 #

    Junior, government act very slow if you had ever been in Iraq you would know that there culture is not about rushing. Its just the oppiste. Things take time, the more time it take the better the RV will be. Iraq is not going to RV until they can cover there budget. As the Price per barrel goes up the RV will be more likely. I think It will be some time in July because that is when the world trade organization’s extention to join is over, with that being said Iraq could get there act togeather and do it before then. So, while you are thinking on that think about this. If you had some thing the world need and wants wouldn’t wait until the perfect time to sell so that you could get the most for your product. Watch the Oil market and the price per barrel and when it peeks a the drops you will see Iraq enter into the game of world trade. As well as thier money

  15. az 21st February 2011 at 20:47 #

    What banks in the states sell dinar?

  16. Wayne 7th March 2011 at 12:26 #

    What is the advantage between small bills versus big bills?

  17. Ronald 15th March 2011 at 14:19 #

    Why can’t we buy oil with the dinars that we are buying at a low price.
    this way they will see the dinars value and they might up the value of the dinar. Duh win win on both sides.

  18. Ray Aber Sr. 4th April 2011 at 21:14 #

    If I was sitting in a bar in Iraq, how much would I pay for a beer?
    Would it be .08 USA or ??? Dinar

  19. Ray Aber Sr. 4th April 2011 at 21:17 #

    What kind of money does an Iraqi citizen use to buy groceries?


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