The Economy of Iraq between two Brackets

The Iraqi government will borrow 58 trillion dinars, the World Bank evaluated 1 dollar to 1300 Iraqi dinar, however, the ministry of finance lowered the price of the dinar to 1450
PM:09:01:27/12/2020


Daban Abdulwahid Hassan
Economist

According to the report and documents corruption closes to billions of dollars in Iraq due to the political and financial disputes, Iraq becomes subsequent of other countries and the local groups that are most of them take advantage and gain the majority of parliament seat.

After 2003 the discussion of the budget has conducted via parliament except in 2014, which belongs to some territorial reason Kurdistan Region was one of them. As we see the Iraqi budget of 2021 has been estimated to 150 trillion dinars, it’s a tremendous budget in comparison with the upcoming changes like lowering the price of oil and having a shortfall the in financial system. The revenue completely has estimated (91, 8) trillion dinars and the deficit could be (58, 8) trillion for the oil and other incomes.

The price of Brent crude oil barrel has valued to 42 dollar while this price refers to the time of declining oil price due to covid-19, but hopefully, a barrel of oil surpasses to 52 dollar at present, OPEC oil more than 50 dollar and Texas reaches to 49 dollar. During the past 9 months, the oil price hasn’t had such a high price, there is some reason to give hopes for the continuous increase of the oil price, for instance, the starting the anti-coronavirus vaccination in the US, Britain and prolonging to some European countries before the end of this year such as German. Moreover, increasing the demand for oil via China and India, furthermore, voting on the 900 billion dollars via the republican and democrats in congress has its impacts on the US market.

The Iraqi government will borrow 58 trillion dinars, the World Bank evaluated 1 dollar to 1300 Iraqi dinar, however, the ministry of finance lowered the price of the dinar to 1450, the Iraqi central bank is responsible opposite the monetary policy according to the article 100& 103 of Iraqi constitution which is a national institution and in charges of the inflation and deflation. Another Iraqi crisis belongs to the different directions that the ministry of finance and the central bank go through.

The central bank provides the sums in the markets, presently, delivers 250 million dollars daily, but before raising the price of dollar 150-175 million dollars has been provided. Iraq exports oil and sells it to US dollar, the dollar has been exchanged via the central bank in order to manage the Iraqi community, and the money which remains becomes a reserve in the central bank.

If the oil price will not increase to more than the present price in the next year and any problems will see in succeeding in coronavirus vaccine Iraq faces a fiscal crisis and will step toward devastation. Thus, Iraq needs to focus on evolving the industrial and agricultural sectors to attain a clear and brilliant future for the Iraqi citizens. Likewise, the Kurdistan Region requires concentrating on the agricultural, industrial and tourism sectors to assure the future of the Kurdistan population and overcome the present difficulties


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