SULAIMANI (ESTA) — Iraqi Council of Ministers approved a draft budget bill for fiscal year 2021 on Monday, as the country wrestles with an economic and financial crisis due to low crude prices.
During a special meeting chaired by Prime Minister Mustafa al-Kadhimi, the Council of Ministers approved the draft budget of 150 trillion dinars ($103 billion) to the Iraqi parliament for consideration and a vote.
The cabinet will send the draft law to the Council of Representatives in the coming days.
The budget deficit would be estimated at 58 trillion dinars ($48 billion). Income is set at 92 trillion dinars, with oil revenue standing at 73 trillion.
The draft budget is based on a world oil price of $42 a barrel and expected oil exports of 3.25 million barrels per day (bpd), including 250,000 bpd from the Kurdistan Region.
The leaked draft of Iraq’s state budget sent Iraqis into a panic as it confirmed the government’s intentions to devaluate the national currency and cut salaries to cope with the impacts of a severe economic crisis.
The draft law, which has to go through a parliament vote first, gives an anticipated exchange rate of 1,450 Iraqi dinars for the dollar — a significant drop from the central bank’s current official rate of around 1,182 dinars for $1.
Hit by squeezed revenues, Iraq’s central bank on Saturday increased the sale price of U.S. dollars to banks and currency exchanges to 1,450 dinars, from 1,182 dinars, seeking to close the gap of widened 2021 budget inflation after a collapse in global oil prices, a major source of Iraq’s financial resources.
Iraq has the world’s fourth-largest oil reserves and depends on oil revenues to fund 95 percent of its national budget.
