Iraq’s projected budget deficit of around $49 billion in 2023 could turn into a surplus by the end of the year due to a sharp increase in oil prices, the official Iraqi newspaper Alsabah said on Thursday, quoting Iraqi financial experts.

Over the past two weeks, global oil prices have remained at least $20 above Iraq’s budget price of $70 a barrel and this could wipe out the shortfall in case the central government sticks to forecast spending, the report said.

It quoted Ahmed Al-Rawi, a Baghdad university economics professor, as saying the 2023 budget includes allocations of around $30 billion for infrastructure, schools, hospitals and housing projects.

“The approval of a three-year budget and the surge in oil prices will allow the government to better manage the deficit,” he said.

Another university expert, Amro Hisham, told the paper that the three-year budget would prevent delays in projects as was the case in previous years. He said the 2023 budget could “record a surplus amidst expectations oil prices could break the $100-mark.”

Iraq, OPEC’s second largest oil producer, based its 2023 budget of $153 billion on crude output of 3.5 million bpd including nearly 400,000 bpd from the Kurdistan region.

(Writing by Nadim Kawach; Editing by Anoop Menon)

(anoop.menon@lseg.com)

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