Kuwait Times

Published Date: January 27, 2010

BAGHDAD: The Iraqi parliament yesterday passed a 2010 budget that sets federal spending at 84.7 trillion Iraqi dinars (around $72.4 billion) and a deficit for this year of 22.9 trillion dinars ($19.6 billion), lawmakers said.

The budget sets an expected oil price of $62.5 per barrel and puts expected average oil exports, virtually the sole source of government revenue, at 2.15 million barrels per day (bpd) in 2010, lawmakers said.

The parliament has approved today the budget of 2010," said Kurdish member of parliament Sami al-Atrushi, a member of the chamber's finance committee. The deficit amounted to 27 percent of total spending and was to be financed with surpluses from previous years and also through domestic and external borrowing, the budget law said.

Alaa al-Sadoun, head of the finance committee, said the new oil projections were an increase from the 2009 budget, which put expected oil exports at 2 million barrels per day and the oil price at $50 a barrel. In a novel move, the parliament included in the new budget a clause setting aside $1 for each barrel of oil produced for oil-producing provinces to use in investment projects, said Ali Hussain Balou, head of parliament's oil and gas committee.

Other provinces involved in oil refining and gas production will receive similar set-asides. The Iraqi government is hoping that a spate of new oil deals will transform its struggling oil sector and increase production that still hovers around pre-invasion levels.

The 2010 budget law also includes authorization for Iraq to seek a $4.5 billion financing arrangement with the International Monetary Fund and contemplates $2 billion in financing by the World Bank. The total income of the Iraqi government was estimated to reach 61.7 trillion dinars ($52.8 billion). The oil producing country relies on crude exports for more than 95 percent of government revenue. -- Reuters