Iraq downsizes budget as oil revenue falls

November 2nd, 2008 - 12:54 pm ICT by IANS  

Baghdad, Nov 2 (Xinhua) Iraq slashed its 2009 budget to $67 billion from the proposed $80 billion as a result of falling global oil prices.”We have a budget of $80 billion as had been proposed for the year 2009, but later the budget was lowered to $67 billion after meeting the International Monetary Fund (IMF) because of the falling oil prices,” Finance Minister Bayan Jabr Solagh Saturday told the US-Iraqi investment conference.

Iraq needs about $400 billion to build infrastructure, making it vital for the economy to bring foreign investments in sectors like electricity, oil, refineries, housing and banks, Solagh said at the conference.

Solagh said $15 billion of the budget will go to help in rebuilding old infrastructure, energy and oil facilities.

Iraq has the world’s third largest oil reserves and the oil revenue is the mainstay of its economy. It is producing roughly 2.5 million barrels a day, mostly for export.

The long-running sanctions and violence, however, have significantly damaged its ability to improve production.

Crude oil prices have plummetted from the record $147.27 a barrel in July to below $70 a barrel.

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