Thursday Morning Iraq Economic News Highlights 6-1-23
Thursday Morning Iraq Economic News Highlights 6-1-23
The Democrat Continues The Policy Of Pressure And Obstructs The Passage Of The Budget
Information / Baghdad... The Kurdistan Democratic Party continues its rejection of the amendments made to the draft budget law, which the committee is about to hand over to the Presidency of Parliament for a vote on, as the dispute centered on Articles 13 and 14, where the dispute arose over oil exports, revenues and selling through SOMO Company, which confirms Barzani's party's desire to be alone in making decisions, although the money and revenues must return to the federal government in Baghdad in order to ensure that they are distributed fairly among everyone, including the region.
A member of the Parliamentary Finance Committee, Mudar Al-Karawi, told Al-Maalouma, that “there are disagreements about several items in the 2023 budget between multiple political forces that prompted the postponement of the sessions of the Finance Committee until the beginning of next week, as the political consensus is very important and must be moved forward.
” He pointed out that "there are efforts made by various forces in order to reach fair solutions for all parties, as holding the next sessions will be difficult in the event that a political agreement is not reached."
On the other hand, a member of the State of Law Coalition Parliamentary Bloc, Representative Muhammad Al-Ziyadi, stated to / information /, that "the issue of presenting the draft federal budget law to a vote will not exceed a very few days, and that early next week it will be presented for voting whether a solution is reached or not.
" He explained that "the representatives of the Kurdistan Democratic Party bloc and the rest of the members of the Finance Committee, each of them still adheres to its opinion regarding paragraphs 13 and 14 of the budget law, as the Democratic delegation that arrived from Erbil is still negotiating with the Finance Committee to solve the problem about the budget."
On the other hand, the representative of the Al-Fateh Alliance, Salem Al-Anbuge, confirmed in a televised interview followed by Al-Maalouma, that "the coordination framework is serious in resolving the 2023 budget through political consensus, but if it fails to achieve its goals, then the option of the political majority will be on the table to resolve the fate of the budget, and therefore the budget It will be passed by a majority if it reaches the House of Representatives, but everyone is still waiting for the outcome of the ongoing talks in Baghdad." LINK
Foreign Minister: Problems Related To The Kurdish Share In The Budget Will Be Resolved
June 1, 2023 Baghdad / Obelisk Al-Hadath: Foreign Minister Fuad Hussein said, on Thursday, that the problems related to the Kurds' share in the budget will be resolved.
Foreign Minister Fuad Hussein visited the President of the Federal Court, and said, after his departure, that he "spoke with the President of the Federal Court as Minister of Foreign Affairs and discussed the internal situation in Iraq."
On May 25, the Finance Committee in the Iraqi Parliament amended Articles 13 and 14 of the Kurdistan region's share of the Iraqi budget, and linked the transfer of the share to the implementation of several new conditions that were not previously included in the draft law.
Hussein said when asked about another meeting of the State Administration Coalition: There will be a solution, take it from me, okay. https://almasalah.com/archives/54466
https://media.almaalomah.me/archive/image/2023/6/1/12f9aa72-4bc8-462e-ab87-8111b63abcab.jpg
Al-Maliki: The Share Of The Region Is The Most Prominent Obstacle To The Path Of The Budget Towards Passing It
Information / Baghdad.. A member of the Parliamentary Legal Committee, Raed al-Maliki, attributed, on Thursday, the reasons for delaying the approval of the budget to the differences over the specificity of the Kurdistan region.
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Al-Maliki said in an interview with the information agency, that "the sharing of oil revenues between Baghdad and Erbil highlighted the differences over the legislation of the budget law," noting that "the budget law is prepared and ready for voting."
He added, "The delay in approving the budget causes negative repercussions on economic activity, the disruption of projects, bonuses and job promotions, the dollar crisis and other negatives that are reflected in purchasing power and low living standards in all governorates of Iraq."
He pointed out that "the draft of the general budget law is ready for voting, and it is waiting for the political parties to reach a consensus in order to determine the voting session on the law."
The head of the Parliamentary National Producer Bloc, Ibtisam Al-Hilali, called on the Presidency of the House of Representatives to hold a session to approve the budget law next week, before the end of the current legislative term. LINK
Al-Maliki Warns Against Disrupting The Budget: Passing It Depends On This Thing
Information/Baghdad.. The representative of Maysan Governorate, Muhammad Saadoun Al-Maliki, warned, on Thursday, of a crisis of failure to pass the federal budget in the event that the southern governorates are not granted their entitlements according to what was approved by the Iraqi constitution.
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Al-Maliki said, in an interview with Al-Maalouma, that "the central and southern governorates have not been granted their entitlements in all budgets over the past years," noting that "their deputies will have a position this time during the session to pass the budget."
He added, "The representatives of the central and southern governorates will take a firm stance towards granting their entitlements guaranteed by the Iraqi constitution, which referred to the distribution of wealth on the basis of population density and the degree of disadvantage."
Al-Maliki indicated, "The southern governorates will get their dues from the petrodollars, in addition to their shares from the border crossings."
The share of the region and some of the paragraphs related to Kurdistan are still a matter of controversy, as they have become a stumbling block in the way of completing the budget and placing it on the agenda for the purpose of voting on it. LINK
The International Monetary Fund Issues A Pessimistic Statement About The Iraqi Economy
Money and business Economy News _ Baghdad The International Monetary Fund issued a pessimistic statement for the Iraqi economy after the post-pandemic recovery last year, including reasons related to the interruption of the Kirkuk-Ceyhan oil pipeline and OPEC cuts.
A number of fund experts who met with Iraq in Jordan from May 24 to 31 last to discuss with the Iraqi authorities about recent economic developments and expectations as well as policy plans in the coming period, said that "the growth momentum of the Iraqi economy has slowed in recent months, after recovering to a level before Pandemic last year, oil production is set to contract by 5 percent in 2023 due to OPEC+ production cuts, Kirkuk-Ceyhan oil pipeline outage, foreign exchange market volatility in the wake of tightening AML/CFT controls by The Central Bank of Iraq on foreign currency sales negatively.
And they indicated, "It is estimated that the non-oil real GDP contracted by 9 percent (on an annual basis) in the last quarter of the year 2022, which cancels its growth during the previous three quarters, with the continued stability of the foreign exchange market, with the help of the measures of the Central Bank.
" In Iraq, non-oil real GDP growth is expected to resume and reach 3.7 percent in 2023, after rising to 7 percent in January,” and inflation has begun to moderate — reflecting a decline in international goods as well as a revaluation of 10 percent to the dinar - and it is expected that the average inflation will reach 5.6 percent in 2023.
The experts also pointed out that "favorable conditions in the oil market supported Iraq's financial and external situation, but the structural imbalances continued to widen. In the year 2022, current account surpluses in public and external finances reached 7.6 and 17.3 percent of GDP, respectively,
on the back of revenues record high oil,” and the CBI’s foreign exchange reserves rose to US$97 billion (11 months of imports), including US$16.3 billion (6 percent of GDP) in fiscal savings accumulated by the government. At the same time, a significant fiscal expansion widened the non-oil primary deficit from 52% to more than 68% of non-oil GDP during the year 2022.
They pointed out that "the largest fiscal easing envisaged in the draft budget law of 2023 would widen the primary non-oil fiscal deficit to 75% of non-oil GDP and bring the total fiscal balance to a deficit of 6.5% of GDP, and the combined effects will lead to Increased government spending, a revaluation of the exchange rate, and lower oil production have pushed the fiscal breakeven price of oil to $96 a barrel.
Experts said, "In the short term, the implementation of the authorities' financial plans could lead to a re-ignition of inflation and fluctuations in the foreign exchange market, and in the medium term, the continuation of current policies in the presence of a great deal of uncertainty about the future course of oil prices poses critical risks to the stability of the economy."
Aggregate, if there is no significant increase in oil prices, the current fiscal situation may lead to widening deficits and intensifying financing pressures in the coming years.
And they stressed that "a tougher fiscal policy is needed to enhance flexibility and reduce the government's dependence on oil revenues while protecting critical social spending needs." Government plan to increase social assistance, the mission recommends stronger targeting to ensure it is directed at the most vulnerable people.
They noted that "improving public financial management remains of paramount importance, and in this context, the mission warns against the planned creation of new extra-budgetary funds, which raises concerns about governance and efficiency, and strongly recommends adherence to budgeted government expenditures.
Moreover, the mission urges "Full implementation of the Government Guarantees Management Framework, including Parliamentary Guarantees. Endorsement and publication of an annual cap and list of Government Guarantees as part of the Budget Law. Accelerated efforts are also needed to establish the Treasury Single Account to strengthen public financial management."
At the same time, the mission welcomed "the progress made by the Central Bank of Iraq in improving liquidity management and frameworks for combating money laundering and terrorist financing, and stresses the importance of close alignment of the position of fiscal and monetary policies in managing the economy." Views 92 06/01/2023 - https://economy-news.net/content.php?id=34511
Member Of Parliamentary Finance: Passing The Budget According To The Recent Changes Will Have Implications For Political Stability
Posted On2023-05-31 By Sotaliraq May 31, 2023 Today, Wednesday, Jamal Cougar, a member of the Iraqi Parliament representing the Finance Committee, held the federal government responsible for delaying the legislation of the budget law, calling for the need to pass the law in accordance with the political agreement concluded between Erbil and Baghdad.
Committee member Jamal Cougar said, in press statements, “The delay in approving the draft budget law is due to Baghdad (the federal government) retracting its agreements with the regional government regarding the paragraphs related to Kurdistan within the budget law, due to its silence until this moment on the amendments that the region’s paragraphs got within the budget.” And what is happening is outside her will and control.”
And he indicated that “the budget law cannot be enacted except after reaching a new agreement between Baghdad and Erbil regarding the region’s share within the budget.”
Cougar continued by saying, "We are not with passing the budget according to the policy of arm-twisting and disagreements, because this may have repercussions on political stability. We are with passing the law with the agreement of all political parties."
The economist, Nabil Al-Marsoumi, said, yesterday, Tuesday, that the coordination framework that includes the ruling Shiite political forces in the country submitted a new proposal on paragraphs 13 and 14 of the budget for the Kurdistan Region.
Al-Marsoumi, in a post on social networking sites “Facebook” today, quoted private sources of this proposal.
According to what is stipulated in the proposal, it is for the Kurdistan Region to deliver 400 thousand barrels of oil per day to the National Oil Marketing Company “SOMO”, and to coordinate the sale of crude with this company as well.
The sources stated that in the event that it is not possible to export oil through the ports of Turkey, Erbil will deliver the oil to Baghdad, and the Ministry of Oil, in turn, will find alternatives to selling Kurdistan's oil or using it internally.
The sources pointed out that the federal government is committed to paying 400,000 barrels of oil from the sale of oil to Erbil in the event that it receives it from the region, provided that the money from oil sales is placed and recycled internally in an account belonging to the Federal Ministry of Finance.
It is noteworthy that the Presidency and the Kurdistan Regional Government have recently objected to the amendments made to the paragraphs related to the region in the financial budget that the Iraqi parliament seeks to approve, describing it as a violation of the laws, the constitution, and the agreements concluded between Erbil and Baghdad, which resulted in the formation of the current federal government headed by Muhammad Shia al-Sudani.
The President of the Kurdistan Region, Nechirvan Barzani, had expressed "deep concern" about what he called the changes that affected the paragraphs of the Iraqi general budget bill related to the constitutional rights of the Kurdistan Region, and said that he rejected them "completely."
And before that, the Prime Minister of the Kurdistan Regional Government, Masrour Barzani, said, “A group in the Finance Committee of the Iraqi Parliament made changes to the draft federal budget, violating a prior agreement we concluded with the State of Prime Minister Muhammad Shia Al-Sudani and his government,” noting that “the agreement that is the cornerstone For cooperation between Erbil and Baghdad, and everyone must respect its provisions.
Last Thursday, the Parliamentary Finance Committee voted to oblige the Kurdistan Region to pay 10% on a monthly basis from the salaries deducted to its employees, while this was included in the budget amendments that are being discussed.
And the Iraqi Council of Ministers approved, on the 13th of last March, the largest financial budget in the history of the country, which exceeded 197 trillion and 828 billion Iraqi dinars (about 152.2 billion dollars), with a total deficit of 63 trillion Iraqi dinars, taking advantage of the rise in oil prices globally. , which constitutes more than 95% of the country’s financial revenues, amid objections from financial and legal experts regarding the budget items, but it has not yet been approved due to disagreements. LINK