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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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    PM's adviser warns of 'risks of low oil' on fiscal policy, spending

    Rocky
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    • Post n°1

    PM's adviser warns of 'risks of low oil' on fiscal policy, spending Empty PM's adviser warns of 'risks of low oil' on fiscal policy, spending

    Post by Rocky Thu 05 Sep 2024, 6:49 am

    PM's adviser warns of 'risks of low oil' on fiscal policy, spending
    • Time: 2024/09/04 17:39:37
       
    • Read: 2,613 times

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    {Economic: Al Furat News} The financial advisor to the Prime Minister, Mazhar Muhammad Salih, warned today, Wednesday, of the "risks of a decline in oil revenues" with the decline in crude prices in global markets.
    Saleh told {Euphrates News} agency, "First, there must be a systematic investigation into the fundamental factors behind the decline in crude oil prices in global markets and their rapid decline in the past few weeks, as China is one of the world's largest economies importing crude oil among nations, as its crude oil imports exceed 10 million barrels of oil per day, and Iraq alone contributes about 10% to China's need for oil, or about 30% of Iraq's oil exports are directed to the Chinese market." He
    explained, "China's demand for oil is linked to the annual growth rates of its economy, and it is a truly direct relationship, as the more the annual growth in GDP increases, the more the demand for crude oil increases."
    Saleh pointed out that "there is a parallel between the increase in GDP and the increase in oil consumption by a percentage ranging between 0.5% to every 1% increase in GDP, although this parallel may change based on energy efficiency and market developments."
    He pointed out that "with this slowdown in Chinese economic growth (the second largest economy in the world), it has begun to escalate during the second half of this year, as the annual growth rate is expected to decline to about 4.5% after it was 5.4% at the beginning of the year, and thus the decline in growth in the Chinese economy has become an urgent issue that greatly affects the global economy and the stability of demand in the energy market."
    He noted that "Chinese economic data shows noticeable weakness, especially in the industrial and service sectors, as the China Purchasing Managers' Index in August 2024, which is a key measure of economic activity, fell to its lowest level in six years." 
    He continued, "Such a decline reflects a decline in both domestic and external demand for goods and services, as new export orders in China fell in July for the first time in eight months, indicating a decline in global demand for Chinese products." 
    The government advisor explained, "New home prices in China also rose, but at a very weak pace, adding more pressure on the Chinese economy itself."
    He pointed out that "international expectations indicate that the growth in the country's GDP will continue to decline to about 3.5% until 2028, reflecting the structural challenges facing the Chinese economy in the long term."
    Saleh said that "based on the above, oil prices witnessed a significant decline today, September 4, 2034, as Brent crude fell to below $74 per barrel. This sharp decline is attributed, as we mentioned earlier, to ongoing concerns about the slowdown in economic growth in China, which negatively affected the demand for oil, which increased the concerns of global markets about the continued weakness of global demand for crude oil."
    He concluded by saying, "As far as Iraq is concerned, the federal general budget issued by Law No. 13 of 2023 (the three-year budget) still hedges against a hypothetical annual deficit of nearly 64 trillion dinars and the price of a barrel of oil for the purposes of assessing oil revenues in the budget during the past year at about $70 per barrel (annual average), so the fiscal policy may face the risks of a decline in oil revenues, by activating the necessary precautionary financial measures to sustain expenditures and in accordance with the priorities and principles outlined by the Federal General Budget Law itself, whether in financing the deficit or in arranging public spending priorities."
    Raghad
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