Dec. 1 (Bloomberg) -- Iraq’s cabinet approved a 93 trillion-dinar ($79.5 billion) federal draft budget for 2011, an increase of about 9 percent on the previous year’s spending plan, the government’s official spokesman said.
The budget is based on an oil price of $73 a barrel and average crude output of 2.25 million barrels a day, according to the statement. It forecasts government revenue at 78.7 trillion dinars, leaving a deficit of 14.3 trillion dinars that will be covered by borrowing, sales of assets and other income, Ali al-Dabbagh said in an e-mailed statement today.
Lawmakers still need to approve the document. The process has been delayed by the eight-month political deadlock that followed inconclusive parliamentary elections in March. Iraq took its first steps to form a new government last month when Prime Minister Nuri al-Maliki secured a second term and was tasked with choosing the new cabinet.
A total of 29 trillion dinars was set aside for investment next year, and 64 trillion for operational expenses, Al-Dabbagh said in the statement. The oil production forecast includes 150,000 barrels of crude exported daily from Kurdistan, he said.
Supplementary payments of 1.6 trillion dinars was set aside for oil and gas-producing provinces, which will be allocated according to their output, according to the spokesman.
Iraq has awarded 12 oil-service contracts and three gas licenses as part of a plan to boost production. Iraq has official oil reserves of 143.1 billion barrels, excluding the northern region of Kurdistan, and depends on oil revenue to fund about 95 percent of its budget.
The 2010 budget of 84.7 trillion dinars was based on an oil price of $63.50 a barrel, and forecast a deficit of 22.9 billion trillion.