Is another economic crisis looming in Iraq, with dropping oil prices?
Iraqis are expressing great concern about the low oil prices amid the coronavirus outbreak, as the government may not be able to pay their salaries in the coming months.
Political and security crises in Iraq have been escalating, and the coronavirus outbreak has recently been added to the list. Meanwhile, news about the dropping oil prices has added fuel to the fire, and Iraqis are all at risk. According to Mazhar Mohammad Saleh, economic affairs adviser to the Iraqi government, 93% of Iraq's budget relies on oil exports.
On March 14, Saleh said, “Iraq has lost half of its financial revenues, with oil prices dropping to $30 [per barrel].”
According to the 2020 budget draft that the government proposed and awaits voting on in the parliament, the budget is $135 billion, and the deficit amounts to $40 billion. What's worse, the numbers were calculated based on a selling price of $56 per barrel of oil. But this price has been almost halved.
Most of the Iraqi budget goes to the salaries of the 7 million employees as operating expenses. The drop in oil prices will directly affect them, and their only income will be government salaries.
