Baghdad: Al Furat News.
The economic advisor in the cabinet, Dr. Madhar Muhammad Salih, proposed a set of solutions aimed at confronting the fiscal deficit in the next year 2021 budget, which was initially estimated at approximately 35 trillion dinars, putting at the forefront of these proposals, financing the deficit gap through Improvement in oil revenues and positive developments that may occur in the energy markets, as well as resorting to external loans.
The head of the Parliamentary Finance Committee, Haitham al-Jubouri, called “during a press release” the government to send the 2021 budget, pointing out that his committee will work to enable the budget law to maximize the state’s non-oil revenues and carry out economic and financial reforms.
And counting on next year’s budget law, the elimination of the “salary delay crisis” if it is approved within the specified period, and as Ahmed Mulla Talal, the spokesman for the Prime Minister, confirmed this during an interview with “Al-Iraqiya News Channel” when he said, “We need to approve a budget 2021 quickly so that salaries are not delayed.
The fiscal deficit in the 2021 budget is a frightening obsession in economic circles, but Saleh believes during his speech to Al-Sabah that “addressing the deficit is done through two types of considerations. If there is a (conservative hypothetical deficit), then the deficit gap during the fiscal year is automatically funded. From improved oil revenues and positive developments that may occur in energy markets in the coming year.
External borrowing and draws the economic expert, to the possibility of obtaining (a real deficit), which requires financing according to the priorities of exchange or spending in the general budget, likely at the same time, Iraq’s openness to borrowing from abroad in order to obtain financing, especially from the multiple international financial institutions Parties, such as the World Bank and various international funds, provided that the resources borrowed from abroad are allocated to investment projects that generate income and employ labor.
Regarding internal borrowing, Saleh believes that if government banks reach a point within which they cannot lend to the government, then they can go to the issuance of optional bonds that are sold directly to the public and carry specific interest and privileges, indicating that “83% of the current monetary mass (as financial wealth is almost idle) The amount is nearly 50 trillion dinars.
He pointed out that “this block is still leaking to the public, and lies outside the banking system in the form of hoardings cut off from the income cycle in the economy and does not deal with the banking system, which means that there are large disruptive financial surpluses that can be borrowed and cover the budget deficit.”
Saleh pointed out that “bonds are a government debt tool in dealings, mortgages, and even tax payments or any other financial obligations, as these sovereign bonds can be taken as guarantees for borrowing and others, in addition to being a government debt instrument of excellent class, which is a context in place in all major markets. Money in the world is to finance the budget, especially the investment side.
News Source:Iraqi Dinar Trader.