Home
Falling oil prices may disrupt budget calculations
Economic 2024/08/08
[You must be registered and logged in to see this image.]
Thank you
Economic experts expressed their fear of the continued decline in oil prices in global markets, stressing that the decline in oil prices below the limits on which the current year’s budget was based, which amounted to $80 per barrel, could cause a financial gap that could lead to a reduction in government spending on vital projects or resorting to borrowing, stressing the need to find strict precautionary measures in light of the tensions that could contribute to further declines in the prices of “black gold.”
This year’s budget was based on an oil price of $80 per barrel, an indicator that many economists have called for hedging against as a result of the decline in oil prices in recent days to $75, stressing that this could exacerbate the budget deficit levels and confuse other economic calculations.
In the meantime, the Prime Minister’s financial advisor, Dr. Mazhar Mohammed Saleh, believes that economic circles around the world were surprised by the sharp fluctuations and declines in the US stock market amid a wave of panic over fears of a potential recession in the world’s largest economy, and that “these declines were based on a combination of local and global economic factors that led to a weakening of investor confidence in the performance of the US economy. If the situation continues for six consecutive months, the recession will turn into a major depression that will hit all economies around the world.”
Saleh pointed out that “the US Energy Information Administration had previously announced that it expected average prices to reach about $89 per barrel for the rest of 2024, but there is a gradual decline in global oil prices, which has begun to coincide with the decline in the value of financial assets in the US markets, especially the decline in the benchmark oil (Brent crude), which ranges at about $76 per barrel for futures contracts after reaching about $88 per barrel last June, which requires more caution and economic precaution.”
In support of the government advisor’s warnings, economic expert Dr. Nawar Al-Saadi, during his interview with “Al-Sabah”, believes that “adopting a price of $80 per barrel in the budget represents a great risk, especially in light of the recent developments witnessed by global markets, as the collapses that hit global stock exchanges caused the price of Brent crude to drop to $76 per barrel, which raises concerns about the realism of the estimates adopted in the Iraqi budget.”
“Global financial markets, especially the oil market, are subject to extreme fluctuations due to many factors, such as geopolitical tensions, decisions related to production policies by producing countries, as well as global economic shifts such as slowdowns in growth or financial crises. This situation makes it very difficult to accurately predict the price of oil in the long term, which means that setting a price of $80 in the budget may be overly optimistic,” explained Al-Saadi.
In light of these facts, Al-Saadi explains, “There are real concerns that the continued decline in the price of oil below the level specified in the budget will create a large financial gap, which could push the government to take exceptional measures to bridge the deficit, such as reducing spending on vital projects or resorting to borrowing, which could add financial burdens to the Iraqi economy and increase economic challenges in the future.”
The spokesman also indicated that “the continued decline in oil prices could directly affect the ability to finance basic services and infrastructure, which could lead to a decline in economic growth rates and an increase in unemployment rates. This situation could worsen if the government does not take rapid steps to enhance non-oil revenue sources and diversify the Iraqi economy to reduce dependence on oil.”
The economic expert, Dr. Nabil Al-Marsoumi, did not deviate far from the previous opinion, when he explained to “Al-Sabah” that “the economic indicators for the second half of this year and even next year show that oil prices are heading towards a decline, and that the global oil markets today are very weak due to the specter of the economic recession dominating the United States, resulting from the decline in industrial performance and the decrease in demand for diesel fuel.”
Al-Marsoumi pointed out that as a result of these global factors, the price of Brent crude is ranging between $74-$75-$76, which could lead to an exacerbation of the country’s budget deficit of about 64 trillion dinars, and thus the budget deficit will increase, and the deficit will be financed from internal and external borrowing of more than 46 trillion dinars, which has negative repercussions on the economy, expecting oil revenues to decline in the next 6 months.
[You must be registered and logged in to see this link.]
» utube 9/12/24 MM&C Iraqi Dinar-#iraqdinar-#xrp-Baghdad-Kurdistan-Historical Meetings-Global Attent
» utube 9/15/24 MM&C Iraq Dinar Update - #xrpripple #iraqidinar Digital Transformation - Global Even
» Government Advisor: E-Governance Application Contributed to Protecting Public Money and Reducing Cor
» At the forefront of which is the Minister of Oil...the wheel of interrogations in Parliament returns
» Iraq and UNAMI discuss mechanisms for implementing Security Council Resolution 2732
» Mr. Al-Hakim: Agriculture can make us independent of oil and reduce dependence on the rentier state
» Algeria establishes a foothold in Iraq's electricity sector
» Ministerial amendments and strengthening the reform program: Al-Sudani’s steps to confront crises
» Economist: The free mass is estimated at 70 trillion dinars and can be invested electronically
» Electricity announces that all its stations will be put under maintenance
» Iraq exports more than two million tons of oil derivatives in 3 months
» Chairman of the Private Banks Association: We have registered more than 13 million accounts and we s
» Government Advisor: These are ways to enhance the great development in the digital payments system i
» Economic Center Calls on the Government to Restructure Airlines and Separate Them from Transportatio
» Al-Sudani: The quadripartite agreement between Iraq, Türkiye, Qatar and the Emirates constitutes the
» Real Estate Bank terminates the assignment of its main branch manager upon his request
» Iraq's oil exports to America rose last week
» Jordan's imports of Iraqi oil decreased by (42%)
» Revealing the most important files that were resolved by the federal government delegation during it
» Tensions are over and goods will be available.. A Kurdish economic view of Pezeshkian’s visit to Erb
» MP: Al-Sudani bears responsibility for obstructing the laws that he withdrew from Parliament
» Al-Sudani snatches the "stay" card from the angry "framework"... and the dispute between them intens
» Al-Sudani: The Iraqi state cannot continue its policy of appointment in the government sector
» Delaying salaries.. Warnings of a “crisis” after two months and the government reassures
» Investment Authority: Opportunities to be presented at the Iraq Forum have completed sectoral approv
» Agriculture clarifies controls on the movement of poultry and its products between governorates
» Religious scholars in Kurdistan: Passing the amendment to the Iraqi Personal Status Law will have ba
» Al-Saabari: Amending the Personal Status Law has become a popular demand
» Baghdad-Ankara Military Agreement... The Terms Go Beyond the Limits!
» Association of Banks: Financial inclusion in Iraq increased by 48.5% during the current year
» Arab Monetary Fund: We are working with Iraq to build national financial strategies
» Prime Minister: We have developed a government program that addresses the real concerns of citizens
» Al-Alaq: 70 digital banks have applied to the Central Bank for a license
» Highlights of Al-Sudani's meeting with Basra dignitaries and farmers
» Al-Sudani: The path of development will transform Iraq into an open country
» Halbousi angry about equipping the Peshmerga with artillery
» Iraq prepares for the upcoming Arab summit
» Iraq imports fruits and vegetables worth $35 million
» Economic Center Calls on the Government to Restructure and Separate Iraqi Airways from the Ministry
» Alsumaria Newsletter: Controversy over laws, deterioration of Baghdad services, and changes in the R
» Oil Minister suffers health problems in the United States
» New York Times: Iraq may receive an Israeli strike... and Baghdad has abandoned its balance
» The dollar continues to rise.. Learn about the exchange rates in the Iraqi markets
» 1000 signatures on the table of 4 parliamentary committees to amend the “Access to Information Law”
» “Money for survival”: Al-Saihoud: Al-Sudani prevented the economics of the parties, so they turned a
» Iraqi banks are in crisis: structural imbalance, double taxation and deep corruption
» Al-Sudani's Advisor: Iraq is witnessing an economic transformation and a big leap with the spread of
» Iraq buys nearly 52 tons of gold in three years
» Arab Monetary Fund: Digital transformation is a key factor in reshaping the banking sector
» Iraq's closest allies: Americans will remain in the Kurdistan Region and Baghdad will not change the
» First cybersecurity platform reveals government interest in protecting data of individuals and insti
» Al-Sudani: The government was subjected to attempts to “distort and obstruct” its work
» Al-Sudani's advisor: The government's internal debt decreased by two trillion dinars
» MP: Personal Status Law Amendments are More Fair than Current Law
» Sudanese advisor: A joint announcement on the schedule for the withdrawal of US forces will be issue
» Due to manipulation and forgery... 25 thousand transactions for those affected by terrorist operatio
» Call for the Bar Association to cleanse its legal body of lawyers who abuse it
» Major General Rasool: Iraq's borders are fully secured
» Central Bank: Electronic payment systems have contributed to enhancing Iraq’s compliance with anti-m
» Al-Sudani's Advisor: Iraq is witnessing an economic transformation and a big leap with the spread of
» Al-Alaq: 70 digital banks have applied to the Central Bank for a license
» Al-Hanthal: We seek to reach a 60% financial inclusion rate by 2025
» Al-Sudani's advisor explains: What is the impact of applying e-governance on corruption in Iraq?
» Baghdad to host tomorrow the conference "Electronic Payment towards Financial Stability in Iraq"
» With high-level government and parliamentary attendance... Launch of the "Electronic Payment towards
» List of gold and dollar prices in local markets in Iraq
» After returning to Iran, Pezeshkian: We signed strategic plans with Iraq in travel and trade
» The budget is exposed to 3 strong shocks.. A representative reveals the extent of its impact on liqu
» Corruption is disrupting the “beating heart of democracy” in Iraq
» Al-Sudani calls on clerics to support the government in the responsibility of managing the general a
» Washington Post: America plans to keep troops in Kurdistan to protect the region from "factions"
» Economist reveals reasons for OPEC quotas' decreased effectiveness in controlling prices
» Al-Rasheed: Selling dollars to travelers exclusively through our branches
» What happened in Bezeshkian's meeting with the leaders of the Coordination Framework in Baghdad?
» He confirmed the existence of extensive discussions to address the financial deficit.. Al-Sudani’s a
» He confirmed the existence of extensive discussions to address the financial deficit.. Al-Sudani’s a
» Will Pezeshkian's visit to Kurdistan pave the way for a new phase in Tehran-Erbil relations?
» Parliamentarian reveals the extent of the budget’s impact on liquidity and state obligations: It is
» Right to Information Law Stirs Controversy Again, Journalists Confront It
» The House of Representatives decides to resume its sessions next Monday
» OPEC Secretary General: Iraq has contributed to providing prominent and multiple contributions to th
» Central Bank Governor Ali Al-Alaq: 70 digital banks have submitted a license application to the Cent
» The Central Bank of Iraq announces the volume of Iraqi funds circulating in international digital ba
» In Alsumaria Newsletter: The Parliament’s Stalled Laws, the Basra Fire, and the Bankruptcy of the Po
» Oil rents and lack of economic diversification.. What is their relationship to the “13 million missi
» CONFIRMS Debate Earrings Were Earpieces—Caught RED-HANDED!
» MM&C 9/12/24 Economic renaissance and unprecedented progress.. Iraq maximizes its non-oil revenues a
» Rafidain explains the benefits of electronic payment
» International Coalition.. Withdrawal by Government-Political Agreement
» Russia: $19 billion is the size of our investments in the energy sector in Iraq
» When will the government resort to amending the budget law? An economic expert explains
» After the decline in oil, a government advisor: We have the capabilities to confront the problems of
» Salaries are “sacred” but the price will be high… Is Iraq ready?
» The “Access to Information” Act classifies documents as secret and undermines access to them.
» Movement leader talks about US military movements inside Iraq
» Legal expert clarifies charges related to audio recordings of officials
» Coinciding with Pezeshkian's visit... indicators of Iranian exports to Iraq
» Al-Hakim calls on Parliament to vote on the Programmers Syndicate Law