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[size=36]Is Iraq heading towards a salary crisis? An economic expert explains![/size]
economy | 02:23 - 07/09/2024
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Mawazine News - Baghdad
Iraqi economic expert Nabil Al-Marsoumi confirmed today, Saturday, that the drop in the price of a barrel of Iraqi oil to $70 will have significant negative effects on the national economy.
Al-Marsoumi indicated, in a statement followed by Mawazine News, that the decline in oil prices, with the decline in oil exports to 3.3 million barrels per day, will lead to a reduction in monthly oil revenues to about 9 trillion dinars.
He explained that of these revenues, one trillion dinars will be allocated to cover the expenses of oil licensing companies, leaving only 8 trillion dinars to finance salaries in various forms, which cost 7.5 trillion dinars per month.
He explained that half a trillion dinars of the remaining revenues will be allocated to finance the ration card items, while the rest of the operating and investment expenses will be financed from scarce non-oil revenues, in addition to internal and external borrowing.
Al-Marsoumi expected that the situation would lead to an increase in taxes and fees, an increase in debts, and great pressure on the foreign reserves of the Central Bank of Iraq, especially in light of the absence of a sovereign fund in Iraq.
He added that the Ministry of Finance may face difficulties in financing salaries over the next two months, which may lead to delays or reductions in salaries if the price of a barrel remains in the $70 range for six months.
It is noteworthy that last week witnessed significant losses in the prices of Basra Heavy and Medium crude, as they fell by 7.90% and 7.60%, respectively.
Basra Heavy crude closed at $68.76, up 40 cents, while Basra Medium crude closed at $71.76, up similarly.
Global oil prices also recorded sharp weekly losses, with West Texas Intermediate crude falling by 7.9% and Brent crude falling by more than 7.6%, amid anticipation of OPEC+’s position.
Al-Marsoumi indicated, in a statement followed by Mawazine News, that the decline in oil prices, with the decline in oil exports to 3.3 million barrels per day, will lead to a reduction in monthly oil revenues to about 9 trillion dinars.
He explained that of these revenues, one trillion dinars will be allocated to cover the expenses of oil licensing companies, leaving only 8 trillion dinars to finance salaries in various forms, which cost 7.5 trillion dinars per month.
He explained that half a trillion dinars of the remaining revenues will be allocated to finance the ration card items, while the rest of the operating and investment expenses will be financed from scarce non-oil revenues, in addition to internal and external borrowing.
Al-Marsoumi expected that the situation would lead to an increase in taxes and fees, an increase in debts, and great pressure on the foreign reserves of the Central Bank of Iraq, especially in light of the absence of a sovereign fund in Iraq.
He added that the Ministry of Finance may face difficulties in financing salaries over the next two months, which may lead to delays or reductions in salaries if the price of a barrel remains in the $70 range for six months.
It is noteworthy that last week witnessed significant losses in the prices of Basra Heavy and Medium crude, as they fell by 7.90% and 7.60%, respectively.
Basra Heavy crude closed at $68.76, up 40 cents, while Basra Medium crude closed at $71.76, up similarly.
Global oil prices also recorded sharp weekly losses, with West Texas Intermediate crude falling by 7.9% and Brent crude falling by more than 7.6%, amid anticipation of OPEC+’s position.
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