The Federal 2021 budget has been prepared by MOF and has been submitted to the council of ministers (COM), at the beginning of the budget year (January 2021). The COM has discussed and approved the draft budget and submitted to the council of representatives (COR), for further discussion and final approval. It has been taken about four months for the COR to complete its discussions, amendments/changes and then approved, by 31 March 2021.
The 2021 budget is the first budget prepared within the period for economic and fiscal reforms planned for the Iraqi economy, through the strategic While Paper (WP), prepared, approved and published by the existing transitional government of Iraq. Accordingly, it is expected that such a prepared 2021 budget should, in its major policy and assumption, be based on and in an alignment with the WP strategic contents, so that it would be the right instrument and the appropriate vehicle through which the economy would begin the journey of recovery, transformation, restructuring and reforming.
In this short paper, we would like to shed light on the original budget structure and assumptions and how it was amended by the COR , on aggregate, sectoral and spatial dimension, analysing how the finally approved budget’s contents relate to the WP and where there are deviations from the WP’s strategic objectives and requirements, the response to COVID-19 aspects, and elaborating on the major issues and challenges that are likely to be faced in the implementation of this approved version.
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Structural Analysis of the 2021 Budget, WP Alignment and Oil Price Breakeven _Final
(*) International Macroeconomic Development Planning and Fiscal Management Reform Specialist