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Parliament expects and is not sure.. Ambiguity about the date and details of the 2025 budget schedules
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[You must be registered and logged in to see this link.] Budget Parliament Finance Committee
The file of the general financial budget for the year 2025 has become ambiguous, which has pushed its schedules to an unknown fate, despite the vote on a three-year budget last year that included the years (2023-2024-2025), while the Finance Committee in the Iraqi Council of Representatives expects the budget schedules to arrive before the end of this year .
Article 77/Second of the Federal General Budget Law No. 13 of 2023, which regulates the preparation of the three-year budget, stipulates that “the government shall send the budget tables for the years 2024 and 2025 to the House of Representatives for approval before the end of the previous fiscal year.”
Last week, a statement by a member of the Parliamentary Finance Committee, Jamal Koujar, sparked controversy after he confirmed that the House of Representatives had not seen any of the details of the 2025 budget schedules, and did not know the size of the budget, the percentage of the deficit, what projects it included, and other financial issues .
Supposed dates
In contrast, member of the Parliamentary Finance Committee, Moeen Al-Kadhimi, expected that the 2025 budget schedules would be submitted by the government to the House of Representatives before the end of the current year 2024 .
Al-Kadhimi said in an interview with the "Al-Jabal" platform, "The tables will be presented in the context of the 2024 experience, and the Ministries of Finance and Planning can present visions through the spending in the operational and investment fields."
" The budget tables must be realistic and free of illogical increases, and governed by oil and non-oil revenues," according to a member of the Parliamentary Finance Committee .
Al-Kadhimi explains that "the 2025 budget must be appropriate with the size of revenues or an increase of 10%," estimating "the size of oil and non-oil revenues at 150 trillion Iraqi dinars."
On October 21, the head of the parliamentary finance committee, Atwan Al-Atwani, expected the 2025 budget tables to reach the House of Representatives early next year, noting that “the oil dispute with the Kurdistan Region is one of the most prominent problems facing the preparation of next year’s budget.”
Fiscal deficit estimates
For his part, the financial advisor to the Prime Minister, Mazhar Muhammad Salih, believes that the constants of the general budget are the same. The higher the oil prices and the stronger the non-oil revenues from fees, taxes and wages, the deficit will remain precautionary .
“ As is known, the submission of estimates of the federal general budget tables for the year 2025 is stipulated in Article 77/Second of Law No. 13 of 2023, the three-year budget (2023-2024-2025), Saleh says, adding that “the law adopts basic constants for the three years, including the fiscal year 2025, including setting the hypothetical deficit at about 64 trillion dinars, with a spending ceiling of nearly 200 trillion dinars.”
Since oil revenues constitute nearly 90% of total annual revenues, the price of a barrel of oil was adopted for the purposes of calculating oil revenues in the budget at approximately $70 per barrel, with an export rate of 3.4 million barrels per day, according to the government advisor .
Saleh said in an interview with Al-Jabal that “during the implementation of the budget law for the past two years, it can be said that the 2023 budget was mostly balanced, as the average barrel of oil sold was about $83. This year, some short-term supplementary assumptions were made, which are about 3% of the gross domestic product, which is considered normal in financing a partial deficit, and it is expected that the average annual barrel of oil sold will reach about $75.”
Regarding the fiscal year 2025, Al-Sudani’s advisor confirms that “the issue has not changed much, as the constants of the general budget are the same. The higher the oil prices and the stronger the non-oil revenues from fees, taxes and wages, the deficit will remain a precaution and nothing more.”
Oil prices are expected to decline significantly in 2025 due to the abundance of supply, Saleh notes, noting that “the US Energy Information Administration (EIA) expects the average price of Brent crude to be around $79 per barrel, reflecting relative stability compared to prices in 2023, and this stability is linked to an expected balance between global supply and demand.”
The Prime Minister's financial advisor had previously warned on October 10, 2024, that Iraq could face a financial crisis in the 2025 budget due to the continued decline in oil prices, which is the country's main source of revenue .
In mid-July, the issue of forgery or manipulation of the 2024 budget tables was raised between the House of Representatives and the Prime Minister’s Office, which sparked controversy and conflict in the data and correspondence between the two parties .
Will the 2024 scenario be repeated?
In turn, economic researcher Diaa Al-Mohsen believes that the 2024 budget scenario will not be repeated with the 2025 budget, as the current year’s budget witnessed political differences and accusations of manipulation .
" The deficit in the 2025 budget will be parallel to the deficit in the 2024 budget," says Al-Mohsen, adding in an interview with the "Al-Jabal" platform, that "the size of the increase is represented in operating expenses, as 60% of employees' salaries are included in operating expenses."
The economic researcher points out that "Iraq suffers from a problem that lies in the lack of diversification of revenues," stressing that "90 percent of Iraqi revenues depend on oil alone."
" The government must diversify revenues and not rely on oil," says Al-Mohsen, warning that "any shock in the oil market will push the Iraqi economy into the abyss."
Regarding the delay in the 2025 budget schedules, the economic expert believes that this delay does not affect employees’ salaries, as it is a three-year budget and salaries are secured .
It is noteworthy that the House of Representatives voted on June 12, 2023, on the Federal Budget Law for the years 2023, 2024 and 2025, with a value of 197 trillion and 828 billion dinars, with a financial deficit of 63 trillion dinars, or approximately a third of the budget .
The three-year budget version included many articles related to foreign borrowing, including continuing borrowing according to previous agreements, in addition to new borrowing from international institutions and various governments. Some borrowing values amounted to more than 3,000 billion dollars .
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[You must be registered and logged in to see this link.] Budget Parliament Finance Committee
Expenditures will not be less than 200 trillion dinars
The file of the general financial budget for the year 2025 has become ambiguous, which has pushed its schedules to an unknown fate, despite the vote on a three-year budget last year that included the years (2023-2024-2025), while the Finance Committee in the Iraqi Council of Representatives expects the budget schedules to arrive before the end of this year .
Article 77/Second of the Federal General Budget Law No. 13 of 2023, which regulates the preparation of the three-year budget, stipulates that “the government shall send the budget tables for the years 2024 and 2025 to the House of Representatives for approval before the end of the previous fiscal year.”
Last week, a statement by a member of the Parliamentary Finance Committee, Jamal Koujar, sparked controversy after he confirmed that the House of Representatives had not seen any of the details of the 2025 budget schedules, and did not know the size of the budget, the percentage of the deficit, what projects it included, and other financial issues .
Supposed dates
In contrast, member of the Parliamentary Finance Committee, Moeen Al-Kadhimi, expected that the 2025 budget schedules would be submitted by the government to the House of Representatives before the end of the current year 2024 .
Al-Kadhimi said in an interview with the "Al-Jabal" platform, "The tables will be presented in the context of the 2024 experience, and the Ministries of Finance and Planning can present visions through the spending in the operational and investment fields."
" The budget tables must be realistic and free of illogical increases, and governed by oil and non-oil revenues," according to a member of the Parliamentary Finance Committee .
Al-Kadhimi explains that "the 2025 budget must be appropriate with the size of revenues or an increase of 10%," estimating "the size of oil and non-oil revenues at 150 trillion Iraqi dinars."
On October 21, the head of the parliamentary finance committee, Atwan Al-Atwani, expected the 2025 budget tables to reach the House of Representatives early next year, noting that “the oil dispute with the Kurdistan Region is one of the most prominent problems facing the preparation of next year’s budget.”
Fiscal deficit estimates
For his part, the financial advisor to the Prime Minister, Mazhar Muhammad Salih, believes that the constants of the general budget are the same. The higher the oil prices and the stronger the non-oil revenues from fees, taxes and wages, the deficit will remain precautionary .
“ As is known, the submission of estimates of the federal general budget tables for the year 2025 is stipulated in Article 77/Second of Law No. 13 of 2023, the three-year budget (2023-2024-2025), Saleh says, adding that “the law adopts basic constants for the three years, including the fiscal year 2025, including setting the hypothetical deficit at about 64 trillion dinars, with a spending ceiling of nearly 200 trillion dinars.”
Since oil revenues constitute nearly 90% of total annual revenues, the price of a barrel of oil was adopted for the purposes of calculating oil revenues in the budget at approximately $70 per barrel, with an export rate of 3.4 million barrels per day, according to the government advisor .
Saleh said in an interview with Al-Jabal that “during the implementation of the budget law for the past two years, it can be said that the 2023 budget was mostly balanced, as the average barrel of oil sold was about $83. This year, some short-term supplementary assumptions were made, which are about 3% of the gross domestic product, which is considered normal in financing a partial deficit, and it is expected that the average annual barrel of oil sold will reach about $75.”
Regarding the fiscal year 2025, Al-Sudani’s advisor confirms that “the issue has not changed much, as the constants of the general budget are the same. The higher the oil prices and the stronger the non-oil revenues from fees, taxes and wages, the deficit will remain a precaution and nothing more.”
Oil prices are expected to decline significantly in 2025 due to the abundance of supply, Saleh notes, noting that “the US Energy Information Administration (EIA) expects the average price of Brent crude to be around $79 per barrel, reflecting relative stability compared to prices in 2023, and this stability is linked to an expected balance between global supply and demand.”
The Prime Minister's financial advisor had previously warned on October 10, 2024, that Iraq could face a financial crisis in the 2025 budget due to the continued decline in oil prices, which is the country's main source of revenue .
In mid-July, the issue of forgery or manipulation of the 2024 budget tables was raised between the House of Representatives and the Prime Minister’s Office, which sparked controversy and conflict in the data and correspondence between the two parties .
Will the 2024 scenario be repeated?
In turn, economic researcher Diaa Al-Mohsen believes that the 2024 budget scenario will not be repeated with the 2025 budget, as the current year’s budget witnessed political differences and accusations of manipulation .
" The deficit in the 2025 budget will be parallel to the deficit in the 2024 budget," says Al-Mohsen, adding in an interview with the "Al-Jabal" platform, that "the size of the increase is represented in operating expenses, as 60% of employees' salaries are included in operating expenses."
The economic researcher points out that "Iraq suffers from a problem that lies in the lack of diversification of revenues," stressing that "90 percent of Iraqi revenues depend on oil alone."
" The government must diversify revenues and not rely on oil," says Al-Mohsen, warning that "any shock in the oil market will push the Iraqi economy into the abyss."
Regarding the delay in the 2025 budget schedules, the economic expert believes that this delay does not affect employees’ salaries, as it is a three-year budget and salaries are secured .
It is noteworthy that the House of Representatives voted on June 12, 2023, on the Federal Budget Law for the years 2023, 2024 and 2025, with a value of 197 trillion and 828 billion dinars, with a financial deficit of 63 trillion dinars, or approximately a third of the budget .
The three-year budget version included many articles related to foreign borrowing, including continuing borrowing according to previous agreements, in addition to new borrowing from international institutions and various governments. Some borrowing values amounted to more than 3,000 billion dollars .
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