BAGHDAD – The Iraqi cabinet approved a $67 billion budget for 2009 on Tuesday after revising its spending plans downward as a result of falling oil prices.
Government spokesman Ali Al-Dabbagh said the 79 trillion Iraqi dinar budget would be sent to parliament for ratification. It includes 17 trillion dinars of investment, he said in a statement.
The government had announced last month it was cutting its spending plans from a forecast $80 billion to $67 billion in light of falling oil prices.
Iraqi officials have said the revised budget would assume an oil price of $62 a barrel while their earlier projections were based on an assumption that prices would average $80.
Oil prices fell nearly 3 percent below $61 a barrel on Tuesday due to renewed gloom over the global economy. The 2008 budget, including a supplementary oil windfall spending package, totalled $69 billion.
Iraq earns nearly all of its government revenue from oil exports, which have averaged between 1.6 million and 2.0 million barrels per day over the course of this year. International oil prices have fallen by more than half from their highs of $147 a barrel in July because of slumping world demand.
The country has a huge demand for investment to rebuild infrastructure wrecked by decades of war and economic sanctions, and has been criticised by some in Washington for being slow to spend the income it earned during the oil boom.
Iraq’s 2008 budget initially called for $48 billion in spending, but the government then passed a supplemental budget of a further $21 billion to spend some of its increased oil revenues this year.
China deal signed
Iraq and China have signed the final agreement on a $3 billion deal to develop the Ahdab oil field south of Baghdad over a 22 year-period, an Iraqi oil ministry official said Tuesday.
An initial agreement was signed in Beijing last August, restoring a Saddam Hussein-era deal that was canceled after the 2003 US-led invasion of Iraq.
The agreement was finalized on Monday at a ceremony in Baghdad, the official said on condition of anonymity. – Agencies