Austerity could save 20 trillion dinars for 2009 budget – expert

BAGHDAD / IraqiNews.com: A financial expert said the government has several options to mend next year’s state budget, including austerity measures, internal debts or seeking foreign loans, adding austerity could cut expenses by 20 trillion Iraqi dinars. “If Iraq’s oil production had been highly flexible, the county could have relied on increasing the output to make up for the losses resulting from oil prices slump,” Mazhar Mohammed Saleh, an advisor for the Central Bank of Iraq (CBI), told IraqiNews.com on the possibility of surmounting a defict expected in 2009 budget. “But, today we have several solutions to strike balance in the budget, on top of them comes austerity on unnecessary expenses, domestic debts or seeking loans from global banks, and this latter should be the less preferred one,” Saleh said. “Domestic debts require issuance of treasury bonds to be purchased by the masses in the hope of improvement in oil prices in the forthcoming period,” he said, adding “this solution is less harmful than receiving loans from international organizations”. He pointed out that austerity could be the best solution. “According to my own views, the government can cut the current spending by 20 trillion Iraqi dinars in the 2009 budget,” Saleh noted. AmR (S) 1