The Iraqi parliament approved the countrys 2010 budget with total expenditures of $72.1bn and revenues of $52.6bn.
It said $26.4bn will be allocated to operational expenditures and $20.2bn earmarked to investment projects. The budget deficit for 2010 was estimated at $20bn, or about 25% of GDP. The budget law said the deficit would be financed by foreign reserves as well as by domestic and foreign borrowing. The budget is based on an estimated average oil price of $62.5 per barrel and average crude oil exports of 2.15 million barrels a day. Bu average oil prices are forecast by various international organizations at 85$/bbl for 2010, which would likely result in a smaller budget deficit of around 4.5% of GDP. Also, the budget authorizes the government to seal an IMF deal of $4.5bn and $2bn funding from the World Bank. Therefore, the external borrowing is likely to be the long-awaited IMF-World Bank program. Further, foreign reserves are at $46bn, at least $10bn are in the Development Fund for Iraq and $20bn-$25bn are government deposits in the domestic banking sector and at the Central Bank of Iraq. As such, borrowing from the domestic market seems more likely than issuing external debt.
Source: Dow Jones Newswires, Merrill Lynch Byblos Bank
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