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Established in 2006 as a Community of Reality

Welcome to the Neno's Place!

Neno's Place Established in 2006 as a Community of Reality


Neno

I can be reached by phone or text 8am-7pm cst 972-768-9772 or, once joining the board I can be reached by a (PM) Private Message.

Established in 2006 as a Community of Reality

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Established in 2006 as a Community of Reality

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    Iraq may need to borrow to cover USD3bn budget deficit

    Rocky
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    Iraq may need to borrow to cover USD3bn budget deficit Empty Iraq may need to borrow to cover USD3bn budget deficit

    Post by Rocky Wed 16 Apr 2014, 2:07 pm

    Iraq may need to borrow to cover USD3bn budget deficit


    Iraq is running a budget deficit of around IQD 35 trillion (USD 30 billion), its highest since 2003, a planning ministry official told Zawya.



    "The deficit is a result of an increase in the amount spent on security, such as army and police wages, in addition to special allocations for states of emergency, for subsidies and ration cards, as well as payments for 75,000 salary grades," said Abdul Zahra al-Hindawi, a spokesman at the Ministry of Planning. "Furthermore, Iraq's revenue is lower than its expenses; the budget is 65% operational and only 35% is for investment."



    Iraq spends roughly USD 40 billion per year on government wages, according to a recent statement from the former deputy governor of the Central Bank of Iraq.





    The country's income is heavily reliant on oil revenue, which accounts for 95% of the budget. Iraq has the fourth largest oil reserves in the world and aims to export 6 million barrels per day of crude by 2017.



    For 2014, a state budget of IQD 174 trillion (USD 150 billion) has been proposed but has yet to receive parliamentary approval.





    Haidar Al-Abadi, chairman of parliament's finance committee, said approval had been delayed because parliament had linked the issue to a vote on a law granting immunity to the elections commission.



    Abadi said that since 2003 the country had been incurring an annual deficit of around IQD 16 trillion, but that the deficit jumped to around IQD 35 trillion this year. He attributed the deficit to the large amounts allocated for wages and pensions, as well as a law granting governorates falling outside regional mandates USD 5 for each barrel of crude oil they produce.



    COVERING THE DEFICIT



    Dergham Mohamed, president of the Economic Information Center in Iraq, voiced concern that the government may not be able to cover the budget deficit without resorting to borrowing. He put Iraq's oil income at around USD 100 billion per year.



    But Ahmed Al Atwani, professor of economics at the College of Management and Economics, University of Wasit said lack of transparency in the accounting system made it difficult to assess what the actual deficit would be.



    "Some revenues such as tariffs and taxes could cover part of the deficit. The deficit could become a surplus if the allocated budget is not spent," he said, referring to development projects that could be stalled by the delay in approving the 2014 budget.



    Kurdish lawmakers have boycotted parliament's sessions on the state budget, in protest against lower allocations for the semi-autonomous Kurdistan region. Baghdad is supposed to give Kurdistan 17% of the national budget after sovereign expenses, but the Iraqi government is now saying payments would depend on the region exporting oil solely under state auspices, which Kurdistan objects to.



    The production capacity of Kurdistan is around 400,000 barrels of oil per day, according to a previous statement by Ashti Hawrami, the natural resource minister in the governorate.

    (zawya)
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