Iraqi economic crisis looms as oil prices collapse
With Brent nearing $30 per barrel, Iraq faces a budget shortfall that could leave the government unable to pay salaries.
Iraqi Prime Minister Adil Abd al-Mahdi chairs a special meeting on the budget, low oil prices, and confronting the new coronavirus including the ministers of finance, oil, planning, the governor of the Central Bank of Iraq on March 11, 2020. (Source: Iraqi Prime Minister's media office)
Crashing oil prices are likely to put a massive strain on Iraq's economy, including a severe budget shortfall that could further undermine the government's ability to respond to myriad crises.
If Brent crude remains near $30 per barrel, due to a price war between Russia and Saudi Arabia and the economic fallout from the spread of the new coronavirus (COVID-19), Iraq is likely to earn less than $3 billion per month, given its recent rate of exports – leaving a monthly deficit of more than $2 billion just to pay current expenditures, according to an Iraq Oil Report analysis based on recent export averages and Ministry of Finance data.
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