Business | Oil & Gas

Oil outlook tarnishes Iraq budget shine

Iraq will take "painful" moves to slash by at least $10-$15 billion (Dh36.7-Dh55 billion) its $80 billion budget after the steep drop in oil prices without hampering the country's economic outlook, the finance minister said yesterday.

  • Reuters
  • Published: 23:43 October 29, 2008
  • Gulf News

Amman: Iraq will take "painful" moves to slash by at least $10-$15 billion (Dh36.7-Dh55 billion) its $80 billion budget after the steep drop in oil prices without hampering the country's economic outlook, the finance minister said yesterday.

"There will be a big decrease in the 2009 budget ...Our [draft] budget was $80 billion a month before and it will go down at least between $10-$15 billion due to the steep drop in oil prices," Finance Minister Bayan Jabor said.

Iraq would now revise the oil price on which it based the $80 billion proposed budget for 2009, which has yet to be enacted by parliament, to $60 per barrel from the previous average $80 per barrel estimate.

"We are faced with painful decisions that we will have to take in the 2009 budget. Oil dropped from our earlier estimates of $80 per barrel and now it will estimated at $60," Jabor said on the sidelines of a meeting with the IMF to review the impact of the dramatic fall in oil prices.

Jabor said the talks will focus on how to design policies to ease the impact of the sharp drop in oil prices which spells trouble for Iraq. The country sits on the world's third-largest proven oil reserves and depends on oil sales for almost all its foreign currency earnings.

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