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Iraq expects $95 oil price for 2012 budget
28/11/2011 14:11
BAGHDAD, Nov. 28 (AKnews) - For its calculation of the 2012 budget, the Iraqi government uses an estimated average price per barrel of crude oil of $95 USD (113,300 IQD).
The government did not follow recommendations of the Finance Committee in the Council of Representatives to consider a lower oil price of $75 USD (89,400 IQD). The Committee had warned last Thursday that a drop of the oil price could negatively affect Iraq's budget plans.
"We don't expect the oil price to fall below $90 USD," Salam al-Quraishi, economic adviser in the government, said.
The 2012 budget is estimated to be $112 billion USD (133.6 trillion IQD). It is an increase of 36% on 2011, but there remains a deficit of $20 billion USD (23.9 billion IQD).
Over the last couple of years, Iraq always planned with a deficit but it never turned out to have one.
One reason is that Iraq never executed its entire budget. In 2010, Iraq only spent $55 billion USD of its budgeted 27.3 billion USD, or in other figures around 76% of its budget. The percentage rose from 68% in Iraq's first sovereign budget in 2006. Observers believe that the government lacks the capacity and skilled politicians to spend great amounts of money. A large, top-down bureaucracy and outdated and contradictory regulations further slow down spending.
A second reason is that -- for example in 2011 -- oil revenues were higher than expected due to an higher oil price. According to different statistics, the oil production accounts for something between 89 and 95% of Iraq's annual budget.
Quaraishi said that the Council of Ministers will approve the budget plan next week, then it will be transferred to the Council of Representatives.
By Jaafar al-Wannan
RN/CU/AKnews
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28/11/2011 14:11
BAGHDAD, Nov. 28 (AKnews) - For its calculation of the 2012 budget, the Iraqi government uses an estimated average price per barrel of crude oil of $95 USD (113,300 IQD).
The government did not follow recommendations of the Finance Committee in the Council of Representatives to consider a lower oil price of $75 USD (89,400 IQD). The Committee had warned last Thursday that a drop of the oil price could negatively affect Iraq's budget plans.
"We don't expect the oil price to fall below $90 USD," Salam al-Quraishi, economic adviser in the government, said.
The 2012 budget is estimated to be $112 billion USD (133.6 trillion IQD). It is an increase of 36% on 2011, but there remains a deficit of $20 billion USD (23.9 billion IQD).
Over the last couple of years, Iraq always planned with a deficit but it never turned out to have one.
One reason is that Iraq never executed its entire budget. In 2010, Iraq only spent $55 billion USD of its budgeted 27.3 billion USD, or in other figures around 76% of its budget. The percentage rose from 68% in Iraq's first sovereign budget in 2006. Observers believe that the government lacks the capacity and skilled politicians to spend great amounts of money. A large, top-down bureaucracy and outdated and contradictory regulations further slow down spending.
A second reason is that -- for example in 2011 -- oil revenues were higher than expected due to an higher oil price. According to different statistics, the oil production accounts for something between 89 and 95% of Iraq's annual budget.
Quaraishi said that the Council of Ministers will approve the budget plan next week, then it will be transferred to the Council of Representatives.
By Jaafar al-Wannan
RN/CU/AKnews
[You must be registered and logged in to see this link.]
