World News | Iraqi president approves record $152 billion budget, IMF criticizes forecasts for being too optimistic

BAGHDAD, June 21 (AP) Iraq’s president on Wednesday approved a record $152 billion budget that was voted on by parliament earlier this month that added about 500,000 public sector jobs.

Iraqi President Abdul Latif Rashid approved a budget with a projected deficit of $48 billion. After months of negotiations, parliament voted on the draft last week, six months into the fiscal year.

Read also | PM Narendra Modi arrives in Washington, starts second leg of first state visit to US; meets President Joe Biden, addresses joint session of Congress (watch video).

The main sticking point in the talks is the distribution of oil revenue between the central government in Baghdad and the semi-autonomous northern Iraqi Kurdish region. The approved draft consolidates Baghdad’s authority over the oil sector and distributes 12.6 percent of revenues to the Kurdish region.

Iraqi Kurdish regional governments will be allowed to sell their own oil, but must first deposit the proceeds in bank accounts that central government officials can monitor. Baghdad would then deduct that amount from the monthly allocation to the Kurdish regional government and transfer any remaining funds to it.

Read also | A senior US State Department official said the United States supports India’s rise as a great power.

According to a Baghdad official, the government expects oil exports from the Kurdish region through Turkey’s Ceyhan port – halted for several months due to legal disputes – to resume next week at a rate of 400,000 barrels per day. The official requested anonymity in accordance with regulations.

The Iraqi president hailed the budget as “a turning point for the government to implement its plans, which include ensuring the necessary needs of citizens, providing basic services such as health and education, restoring infrastructure, and launching important strategic projects.”

The budget also approves the same amount for 2024 and 2025, including substantial spending to increase public wages and invest in reconstruction projects ravaged by years of conflict. It also instituted provisions for raising wages for public sector employees and converting contract workers into permanent public employees.

Meanwhile, the country’s Interior Ministry announced the recruitment of 37,100 police officers for a three-year period at a monthly salary of IQD 500,000 (about US$377). The ministry is looking for Iraqis between the ages of 18 and 22.

The budget’s upbeat revenue forecasts and more than half a million new public sector jobs have drawn criticism.

Abdusalam Hassan, an Iraqi researcher and economist, said the country’s spending was already too high and the new budget “is like a ticking time bomb that will adversely affect Iraq’s fragile economy.”

In a recent report, the International Monetary Fund warned of “fiscal looseness” and Baghdad’s heavy reliance on oil revenues. The IMF also urged the Iraqi government to implement stricter fiscal policies. (Associated Press)

(This is an unedited and auto-generated story from a Syndicated News feed, the body of content may not have been modified or edited by LatestLY staff)