Saturday Afternoon Iraq Economic News Highlights 9-2-22

Economist: Inflation Has Reached More Than 12% In Iraq

Iraqi market   Money and business   Economy News – Baghdad   The annual inflation level in Iraq for the month of July increased by 12.3% compared to the same period in 2019, bringing the record in July 2022 to 117.8, which is the highest inflation rate recorded in the country in more than ten years .

The economic and financial expert, Manar Al-Obaidi, said in a press statement, seen by "Economy News", that "the inflation level in food prices rose by 11.2%, while the inflation level in housing, water, electricity and gas prices rose to 10.1 %."

At the level of transportation prices, the inflation rate in Iraq increased by 16.8%, and the most inflated rate was the prices of health and medical services, which rose by 27.8% compared to July 2019, and the general index of the Health Department reached 149.9, an increase of 50% compared to the measurement year. Which is considered the year 2012, according to Al-Obeidi .

The Iraqi economic expert attributed the reasons for the high rates of inflation to many factors, including “the rise in oil prices, which reflects its shadow on all goods and services, in addition to changing the exchange rate of the dinar against the dollar,” and these two reasons are enough to raise inflation rates to reach these record levels .

According to the data of the Iraqi Ministry of Planning, the number of citizens below the poverty line has reached "9 million people" and with the high rates of inflation, it is expected that this percentage will rise in the future, according to Al-Obeidi .

Al-Obeidi pointed out that "the Iraqi government does not take any actual measures that would reduce the inflation rates that qualify for the rise as a result of the lack of approval of the budget and the absence of programs that limit the impact of the inflation level on the Iraqi citizen ."

He pointed out that "the local products that would reduce inflation rates are still below the level and unable to cover the need for imported products."  14 . views Added 09/03/2022 - 1:02 PM  Update 09/03/2022 - 1:08 PM https://economy-news.net/content.php?id=29539

Parliamentary Finance Calls On Two Ministries To Finish Preparing Next Year's Budget[/Size]

Economie   10:14 - 09-03-2022   A member of the Parliamentary Finance Committee, Jamal Cougar, called on the ministries of planning and finance to finish preparing the next year's budget, indicating that as soon as the next government is formed, it will be sent directly. Cougar said, that the month of October requires the government to send the budget to Parliament, but its transfer to the caretaker government prevents this.

He added, that the Financial Management Law requires the Ministry of Finance and Planning to request the ministries, agencies and companies for their budgets required to prepare the budget in full within terms and paragraphs, after which it will be sent to Parliament next October, provided that the next government is formed https://kirkuktv.net/AR/Details/8620

Al-Kazemi’s Advisor: The Benefits Accruing From Selling Oil Can Only Be Determined By The End Of The Current Fiscal Year

Economie  20:18 - 09-02-2022  Today, Friday, the financial advisor to the Prime Minister, Mazhar Muhammad Salih, determined the size of the reserves accumulated during the first half of the current year 2022, while offering a conditional option to employ the surplus financial resources in the absence of the budget.

Saleh said, "The actual balance of the surpluses achieved from selling oil can only be calculated by the end of the current fiscal year, as estimates (the first half of the current year 2022) indicate the accumulation of public financial reserves of up to 20 billion dollars and they cannot be disposed of outside what is stipulated in the article. 13 of the amended Federal Financial Management Law No. 6 of 2019, i.e. spending 1/12 of the total actual current expenditures in the 2021 budget.

He added, "Although the allocations contained in the Emergency Food Security and Development Law No. 2 of 2022 have allocated amounts close to the financial savings achieved in the first half of 2022, what can be expected of financial savings until the end of the current year is perhaps an amount Its balance is between 15-20 billion dollars, in light of the average oil prices in the global market estimated at about $100 per barrel and an export capacity of about 3.3 million barrels of oil per day, in addition to the exchange restrictions and limitations in the aforementioned two laws.”

He continued: "Based on the foregoing, the possible and available option is to employ those surplus financial resources in a (sovereign fund) based on the provisions of Article 19 of the Federal Financial Management Law in force, provided that the legal adaptation that links the establishment of the sovereign fund to the adoption of a law for the general budget is available."

He concluded: "Thus, financial legislation remains the objective basis for all future financial actions."

https://kirkuktv.net/AR/Details/8606

Companies Call On The United States And Other Countries To Enter The “Oil” Crisis Line Between Baghdad And Erbil

Posted On2022-09-03 By Sotaliraq     Today, Friday, an economic report revealed that oil companies operating in the Kurdistan Region requested assistance from Washington to defuse the crisis between Baghdad and Erbil regarding their work and the flow of oil to Turkey. In the region, I contacted four governments in this regard.

The oil companies operating in the Kurdistan Region have asked the United States to help defuse the growing tension between the federal government and the regional government," Reuters news agency said.

Reuters based its report on "a message I have seen, and three sources, who say that this US intervention is necessary in order to ensure the continued flow of oil through northern Iraq to Turkey to prevent the latter from increasing oil shipments from Iran and Russia."

According to this message and sources, "the economy of the Kurdistan Region may be at risk of collapse if it loses its revenues from oil sales."

The Reuters report stated that "relations were strained last February when the Federal Court considered that the oil and gas law related to regulating the oil industry in Kurdistan is unconstitutional," noting that "after the ruling was issued, the federal government strengthened its efforts with the aim of controlling export revenues from Erbil.”

According to a copy of the letter seen by Reuters, "Before the ruling was issued, the Dallas-based company (HKN Energy) wrote to the US ambassadors in Baghdad and Ankara, specifically last January, asking for mediation. The United States is in a separate case dating back to 2014 related to the Iraqi-Turkish pipeline (ITP).

The report stated that "Baghdad "claims that Turkey violated the ITP agreement by allowing the transit of Kurdistan Regional Government exports, which Baghdad considers illegal, through the pipeline to the Turkish port of Ceyhan."

The report indicated that "the Iraqi Oil Ministry said that the last session to consider the case was held in Paris last July, and that the International Chamber of Commerce will announce its final decision in the coming months."

Reuters" quoted three sources as saying that "the possible next steps on the part of Turkey are still not clear if the verdict is issued in favor of Baghdad, which is a likely possibility."

The agency quoted a representative of the company, who asked not to be identified, as saying that “at least one other oil company has moved continuously with higher authorities in four governments concerned, directly and indirectly, in order to encourage participation.”

Reuters pointed out that "other operators in the Kurdistan Region, "General Energy" and "Chevron" refused to comment on the arbitration case, while "DNO" and "Gulf Keystone" did not respond to requests from Reuters for comment.

Oil drums are in danger

According to the message obtained by "Reuters" and addressed by "HKN" to the ambassadors of the United States, "stopping the flow of oil through (ITP) will lead to the collapse of the economy of the Kurdistan Region of Iraq."

Neither the Ministry of Natural Resources in the Kurdistan Regional Government nor the Ministry of Oil in Baghdad have commented on requests from "Reuters" to comment on the news.

The report pointed out that “(ITP) has a pumping capacity of 900,000 barrels per day of crude, which represents about 1% of the daily global demand for oil, through the state marketing company (SOMO) as well as the regional government. Currently, 500,000 barrels per day are being pumped from the northern Iraqi fields.

According to analysts, "the companies will withdraw from the region unless the work environment improves."

With the deteriorating security situation, a group of small and medium-sized companies have moved in order to achieve US involvement to help deter attacks targeting energy infrastructure and enhance security in general," the report stated.

The report, quoting sources concerned with the case, stated, “These companies also endorsed letters written by members of the US Congress to Secretary of State Anthony Blinken in August, urging them to engage in high-level engagement with Erbil and Baghdad with the aim of protecting the stability of the Kurdistan Region’s economy and ensuring Iraq is free from interference. Iranian".

faded American interest

The report quoted US State Department spokesman Ned Price as saying on August 16 that "the differences between Baghdad and Erbil concern them, but the United States encourages dialogue."

The report pointed out that "the US State Department summoned the American law firm (Elkins & Vision), which represents the Iraqi Ministry of Oil, in order to review the data on the dispute over (ITP) in July."

The report continued, quoting an informed source as saying that "it is likely that two more sessions will be held in Baghdad and Washington."

While the US State Department declined to comment, industry experts said they "believe that US intervention is not likely and may not help anyway."

The report quoted Raad Al-Qadri, Managing Director of Energy, Climate and Sustainability in the "Eurasia Group", as saying that "the United States separated from Iraq during the past decade, and that pressure from Washington or other governments, will not resolve the issues between Baghdad and the Kurds."

A Kurdish official told Reuters last August that "the regional government has asked the United States to strengthen its defense capabilities," but he indicated that he was "not optimistic because the most important priority for the United States is to revive the nuclear agreement with Iran." LINK