No budget deficit by the end of 2021, with a clear weakness in development projects!

Dr. Adnan Bahia

As reported in SOMO,

January revenue: $4.739 billion: February: $5,000 billion. Thus, the total revenue for only six months is approximately $33 billion (according to Sumo)

 If we calculate the revenues of the month of July, which came to an end, where sales contracts were signed for July (as stated by the official spokesman of the Ministry of Oil Mr. Assim Jihad that the sales contracts are monthly) and estimated a daily selling rate of 2.9 million barrels calculated at the rate of the past months and at a minimum rate of approximately $72 per barrel, the total income of oil export revenues for the first seven months is approximately 40 billion dollars.

Compared to the $28.6 billion in oil revenues (the first seven months and according to the budget approved), the export of 3 million barrels per day (considering 250,000 from Kurdistan is not counted in Somo's monthly revenue reports) is at $45 per barrel. With oil revenues for the remaining five months of the year and recovery of the larger economies, oil prices are likely to stabilize at high levels if not higher than the current level, with sales likely to rise, with an annual surplus of oil revenues of approximately $20 billion or more, equivalent to the amount of the financial gap (planned deficit) of $20 billion (28,673 trillion) Dinar calculated on a basis (1450 dinars per dollar). There are also alternative sources contained in the budget (the deduction of treasury transfers at the Central Bank, revolving balance, loans from government banks such as Rafidain, Rashid and Iraqi trade, and national bonds) to cover the remainder of the deficit.

On the other hand, we would like to point out that, through experience in previous budgets, the deficit has always been a planned deficit, i.e. just a number that completes the fiscal year with little effect., and this particular year where the budget was approved at the end of April and the exchange was 12/1 for the four months, in addition to the low exchange rate up to this month, which means that the exchange rate for this year will not exceed at best 70% of the budget amount, and therefore there is no real deficit in this budget, This means no argument for those who pay for foreign loans except for other purposes.

The difference between the oil revenues guessed in the budget for seven months and the real surplus of $11 billion is sufficient to offset foreign loans linked to contracts (approximately $10 billion to finance all project contracts whose financing has been linked to foreign contracts associated with non-bidding companies, at the expense of quality and cost) as the cost is inflated and after calculating loan interest, the real cost of the contract exceeds the real cost of the contract and may reach three times as much, and the lack of quality of the Contracts which have not been subject to the principle of competition, in addition to the losses arising from tax and customs exemptions and covered by fraudulent , bribery and commission transactions, which often do not represent development or service projects, some of which can be implemented through investment and the private sector such as Mosul airport, which was allocated 300 million euros and the Baghdad Metro project, which allocated 150 million euros of French loan.