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Iraq Cabinet passes $105.48 billion budget with $19.72b deficit

Iraq Cabinet passes $105.48 billion budget with $19.72b deficit

BAGHDAD: The Cabinet of Iraq has approved the 2015 budget of 123 trillion Iraqi dinars ($105.48 billion) comes with a deficit of 23 trillion dinars ($19.72 billion). Jabouri added that the budget calculations are based on an assumed oil price of $60 a barrel.

The approval marks an achievement for Prime Minister Haider al-Abadi’s government as the previous administration never managed to approve the 2014 budget due to political wrangling and the long-running dispute between the federal government and the northern Kurdish region over rights to develop and export oil.

Approval is a big achievement given the current economic and military situation we are going through,” Jabouri told The Associated Press.

He said the deficit would be covered by loans as well as the introduction of new taxes and customs tariffs, but declined to provide further details.

Parliament is expected to approve the budget quickly.

Iraq was plunged into crisis last summer when the Islamic State extremist group swept across the north and west, seizing vast swaths of territory including the country’s second largest city Mosul. Government forces, Kurdish fighters and Shiite militias have since clawed back some of the territory with the help of U.S.-led coalition airstrikes.

Due to the current turmoil, Iraq’s economy is forecast to shrink — for the first time since 2003 — by 2.75 percent in 2014, according to the International Monetary Fund.

Iraq has the world’s fourth largest oil reserves, and oil revenues make up nearly 95 percent of its budget. The price of oil has fallen by about half since June to around $55 per barrel.