Iraq's Oil Revenue Dominates National Budget Amid Calls for Economic Diversification
Shafaq News/ The Iraqi Ministry of Finance unveiled its financial report on Monday, revealing that the country's revenues from the past five months surpassed 45 trillion dinars ($30.6 billion). A staggering 95.5% of these revenues were sourced from oil,
The report, covering the fiscal year 2023 from January to May, recorded total revenue of 45,552,080,454,325 dinars, with 1,935,958,139,000 dinars classified as transfer revenues excluded from the overall figure. Meanwhile, total expenditures, including advances, reached 37,856,446,546,000 dinars.
The country's oil revenues reached an impressive 45,462,287,873,109 dinars. In contrast, non-oil revenues contributed significantly to the federal budget, amounting to 2,025,750,720,592 dinars.
Economist Muhammad al-Hassani voiced concern over Iraq's economy, cautioning that over-reliance on oil as a rentier economy poses a significant threat to its future financial stability.
Al-Hassani told Shafaq News Agency that any sudden global oil price downturn could push Iraq towards a budgetary crisis, highlighting the urgent need for economic diversification.
The international community's pivot towards clean energy and decreasing dependence on fossil fuels has prompted several countries worldwide to invest substantial funds in financing green energy projects. Developed nations, for instance, have allocated no less than 40% of their resources towards this transformative approach.
Al-Hassani drew attention to the efforts made by other oil-producing countries, particularly those in the Gulf region, in diversifying their economies to reduce reliance on oil. However, Iraq has not followed suit, persisting in its dependence on oil and gas industries without broadening its economic portfolio.
It is important to note that Iraq's budgetary reliance on oil has had far-reaching implications, making it the region's largest importer of goods and commodities. This trade dynamic leaves the country vulnerable to fluctuations in oil prices and global market dynamics.
