Baghdad: Economic Expert Safwan Qusay proposed a precautionary economic plan aimed at controlling Iraq’s budget deficit and the decline in oil prices without impacting the salaries of state employees.

According to National Iraqi News Agency, Qusay emphasized the need for strategic adjustments given the current oil price of $62 per barrel, which remains below the budget estimate of $70 per barrel. He expressed hope that OPEC and its partners, including Russia and Saudi Arabia, would reconsider production levels to achieve a voluntary reduction of two million barrels per day. This measure is expected to elevate oil prices to around $70, thereby stabilizing the economic situation.

Qusay highlighted that Iraq must adhere to its OPEC quota and seek an understanding with major producers, as the country’s budget is heavily reliant on oil revenues. He suggested purchasing additional quotas to compensate for federal production shortfalls based on budget estimates. Alternatively, the Ministry of Finance should explore financing public expenditures through means other than cash spending. This could involve implementing an in-kind spending project that converts idle capital into shares in real estate, industrial, tourism, and commercial sectors, as well as refineries, ports, and airports, to mitigate the shortfall in cash spending.

He further explained that transferring idle capital could release a portion of government capital, transitioning it to public ownership. Qusay noted that contractors, oil-producing governorates, the Central Bank, and financial institutions such as the Rafidain and Rasheed banks are creditors to the Ministry of Finance. By reallocating a portion of idle capital to these creditors, the pressure on cash spending could be alleviated, thereby avoiding reductions in allocations or salaries.

Qusay concluded by advocating for the restoration of allocations and the rationalization of expenditures related to goods and services, ensuring that low-income groups remain unaffected.