ERBIL, Kurdistan Region — The finance committee in Iraq’s parliament slashed more than 30 trillion dinars ($20.5 billion) from the 2021 budget by squeezing unnecessary expenditures, a committee member told Rudaw English on Saturday. The parliament’s amendments to the budget have more than halved the projected deficit.
Sherwan Mirza a member of the Iraqi parliament who sits on the finance committee confirmed they had reduced total expenditures from 164 trillion dinars to less than 130 trillion in the bill.
The committee also decided to raise the price of oil in the budget from $42 to $45 to maximize revenues, Mirza said. Brent crude is now valued at $55 per barrel and Iraqi crude is selling for between $52 and $53.
The budget bill submitted by the cabinet to parliament included a 71 trillion dinar deficit.
The parliamentary finance committee’s revisions have brought the deficit down to less than 30 trillion dinars and they expect to submit the budget to the legislature for a vote within 10 days, according to spokesperson Ahmad al-Saffar.
Iraq is reportedly in talks with the International Monetary Fund (IMF) for a loan package amounting to $6 billion that should further ease the deficit.
Mirza said the negotiations with the IMF indicate that Iraq has regained the trust of international institutions, however, parliament "will not vote for new loans."
"There is an inclination to remove all articles that allow Iraq to borrow more money in the budget, as it burdens Iraq with more debts," he said.
Late last year, Baghdad borrowed over $25 billion from the country's central bank in an attempt to cover the state's fiscal deficit and pay civil sector employees.
In mid-December, the central bank devalued the currency in an effort to combat a national liquidity crisis and bring much-needed cash into government coffers.
