Iraq’s new budget puts deficit at $18.6 b

Iraq’s proposed 2011 budget runs a deficit of 22 trillion dinars ($18.6 billion) and assumes oil exports of 2.4 million barrels per day, Deputy Finance Minister Fadhil Nabi said on Sunday.

The ministry last month proposed a budget of 102 trillion dinars ($86.4 billion) based on a world oil price of $70 a barrel.

“We’ve sent the budget to the cabinet. We are waiting for them to discuss the issue,” Nabi said. “Possibly during this week the economic committee will hold a meeting and discuss the budget.”

The government, which is trying to rebuild Iraq after years of war and sanctions, is dependent on oil revenue to fund about 95 percent of its budget.

The Opec producer has signed deals with global oil firms that could boost its output capacity to 12 million barrels per day in six to seven years from the current 2.5 million a day, potentially rivalling top Opec producer Saudi Arabia.    

The assumed exports of 2.4 million bpd next year would represent a significant boost. Iraq’s exports in September were 2.021 million bpd.

The International Monetary Fund approved a disbursement of $741 million to Iraq on Oct 1 under a $3.7 billion loan program and commended the government for maintaining macroeconomic stability in the face of difficult security conditions.

It said Iraq’s budget was likely to swing into surplus in 2012 based on conservative assumptions for oil prices and exports.

The budget must be approved by the cabinet and then by parliament. Iraqis elected a new parliament in March but no political bloc won enough seats for a governing majority. Politicians have been squabbling over the formation of a new government since then, and parliament has not been sitting regularly.-Reuters