Tuesday, October 9, 2007

Iraq sees $42 bln 2008 budget, up $1 bln on 2007

By Mariam Karouny

BAGHDAD, Oct 8 (Reuters) - Iraq has prepared a $42 billion budget for 2008, an increase of $1 billion on this year, Finance Minister Bayan Jabor said.

"We have finished the budget and now all it needs is printing," he told Reuters on Sunday. "It is $42 billion, that is $1 billion more than last year's."

Jabor said $10 billion would be spent on investment projects outside the Baghdad region, focusing on schools and water projects. An additional $4 billion unspent this year would be rolled over into next year, boosting spending to $46 billion.

"It will include investment money for $10 billion and it targets supporting the southern, northern and western provinces. Their share will be increased by 55 percent," he said.

"Also some amounts from 2007 will be ... given to the ministries and provinces. This will give ... extra money for the budget which means it is around $46 billion."

Jabor said Iraq calculated 2008 revenues based on assumed oil exports of 1.7 million barrels per day at $50 per barrel. Average exports in 2007 have been 1.6 million bpd, he said.

The 2008 budget also assumes an exchange rate of 1,260 dinars to the U.S. dollar, the same as this year. But the government may strengthen the Iraqi currency to 1,200 to the dollar during the course of the year, Jabor said.

Last year the government strengthened the dinar by 13 percent against the dollar after raising interest rates to limit the use of dollars in the economy and stem inflation.

Iraq's dependence on oil revenues will fall to about 88 percent next year from 94 percent in 2007 because of additional income from the telecommunications sector, Jabor said.

The dinar's 13 percent gain against the dollar at the start of the year had helped boost central bank foreign currency and gold reserves to $22 billion, Jabor added. He did not give a comparative figure for last year.


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