Tishwash: After its approval.. Parliamentary Finance reveals its procedures regarding the budget
A member of the Parliamentary Finance Committee, Mustafa Al-Karawi, revealed today, Thursday, the procedures of his committee regarding the budget.
Al-Karawi told Earth News Agency, “After the end of the legislative recess, the implementation of the budget will be followed up after the Ministry of Finance issues instructions for its implementation.”
He added, “The most important details of the budget is the issue of internal and external debts, as well as the implementation of strategic projects that were included in the budget.” link
CandyKisses: The tripartite budget deficit will exceed 300 trillion dinars
Ivan Shaker Aldobardani
Due to the tripartite budget, the Central Bank of Iraq will face a very difficult challenge and task, which is to provide the cash mass of Iraqi dinars in order to meet the operational and investment expenses of the tripartite budget, which was recently approved with a total value of 200 trillion dinars.
Where the dilemma of the budget that was approved for three years lies in its allocations, and where the lion’s share was allocated as usual to operational expenses at the expense of investment expenses, most of which were ink on paper two decades ago, and where operating expenses burdened the Iraqi economy and twisted its arm, specifically in the last ten years that passed.
Economic recession:
The other dilemma lies in the budget, which is the pricing of oil at $ 70 per barrel, and this pricing is very high and incorrect, and note that oil prices are difficult to predict for three years because it is affected by many factors, most notably geopolitical factors, and it was supposed to price oil at $ 50 per barrel in the budget, because according to the data currently available, as the global economy is coming to an economic recession, led by the United States of America, China and members of the Union European, Britain and the rest of the developed countries.
Some of which have officially entered the economic recession spiral, and where the recession will be more severe in the second half of this year, due to the tight monetary policy adopted by most of the central banks of developed countries, led by the United States of America, where the interest rate of the US Federal Reserve reached 5.25% in order to fight inflation and reduce it to the target levels of 2%, which is a harmful rate for the US economy
And at the last meeting of the Federal Reserve The American temporarily stopped raising interest rates in order not to enter the US economy into a severe recession, and also the European Central Bank continues its tight monetary policy, where the interest rate of the European Central Bank reached 4%, and the repercussions of this tightening monetary policy are serious and painful on the global economy, and the banking sector was one of the victims of this tight monetary policy, as it led to the bankruptcy of several banks in the United States of America and in the European region as well.
And where this tight monetary policy of the US Federal Reserve led to a decline in the growth levels of the GDP of the US economy, and this indicates the beginning of the economic recession of the United States of America and therefore will have repercussions to the decline in demand for oil in the second half of this year and this will negatively affect oil prices
And on the other hand, similar to the United States of America, the Chinese economic data recently came negatively, and this suggests to us that the Chinese economy is also suffering Until this moment, and also the industrial sector has not recovered as required, and as China is the largest importer of oil in the world, and therefore its repercussions will be negative on oil prices in the coming period, as well as the German economy, which is the strongest economy in Europe, as its economy entered a state of recession officially
If you will, the so-called technical contraction after recording a decline in GDP for the second consecutive quarter, under the shadow of a tight monetary policy by the European Central Bank, which arrived The interest rate is 4%, so in light of these data, I expect that oil prices will fall in the second half of this year unless there are geopolitical factors that could change the general direction of oil prices and the opposite of what is expected.
JPMorgan report:
Recently, a report was issued by JPMorgan that there will be a strong sale of global stocks in the coming period, and the majority of the sale will be by sovereign wealth funds and pension funds, where they are expected to sell part of their assets from stocks and go to bonds, and this will lead to a strong selling wave in the stock market, specifically on Wall Street, and this will have negative repercussions on the economies of the world.
This suggests to us that markets are in a state of uncertainty and anxiety, and this will force the owners of large capitals to flee from stocks and go towards bonds for fear of exacerbating the economic recession crisis, and thus will lead to weak demand for oil, which will negatively affect oil prices in the coming period.
OPEC Plus:
Because we are on the verge of an economic recession and there is a weak demand for oil, and fears of low oil prices, the OPEC Plus alliance was forced to take preventive measures in order to maintain oil prices, as the OPEC Plus alliance has reduced its production twice in the past 3 months.
Had it not been for OPEC Plus’ precautionary moves, we would have seen oil prices approaching levels of 50 US dollars and below, where the first reduction raised the value of prices to levels above 86 US dollars, but they could not maintain this level and oil prices returned to decline to levels above 70 US dollars due to fears of the expected economic recession.
It is likely that the honeymoon between the members of OPEC Plus will not last long, and that we will see differences in the coming period from within the OPEC Plus alliance, and if it happens, it will have a negative impact on oil prices, knowing that OPEC’s history is full of differences between its members, the most prominent of which was the Russian-Saudi dispute in 2022
And even if the OPEC Plus alliance reduces production a third or more times, in order to maintain oil prices, this will be at the expense of Reducing Iraq’s share of production, and in both cases, if oil prices fall or reduce the amount of exports, it will generate a larger budget deficit because the amount approved in the budget is 3.5 million barrels of oil per day and priced at $ 70 per barrel.
In the event that oil prices fall, its repercussions will be serious on the Iraqi economy because it is a rentier economy par excellence, and then Iraq will enter into a financial crisis with ominous consequences, because it depends on oil by 90%, and at that time the Iraqi government will be forced to repeat the borrowing scenario in order to cover operational expenses as happened in 2021
But this time the Iraqi economy will slide into a very dangerous slope and will not be spared from this expected crisis as it happened in 20202021
Also, the Iraqi government will tend to borrow through the Central Bank of Iraq and issue bonds, i.e. issuing a monetary mass, i.e. the high rate of inflation and the weakening of the value of the Iraqi dinar, meaning we will see the value of the Iraqi dinar collapse in conjunction with the high rate of inflation and also we will see a jump in the high borrowing rate, and also the non-implementation of a large part of the budget, specifically in investment expenditures, and it can be ink on paper.
The real and most severe deficit will be early in 2024 and more severe than in 2023 because the signs of economic recession will appear more deeply in the global economy, and because Iraq sold oil in the first half of this year per barrel more than $ 70.
Researcher in Iraqi and international economic affairs / Ivan Shaker Al-Dobardani
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Harambe: Indonesia Ranks Sixth Among Countries with Most Startups | Jakarta Globe (6/21/23)
Jakarta. Indonesia has great prospects as a digital economy giant as the country is home to the sixth-most startups in the world, according to a senior government official.
“As of 2023, Indonesia is in sixth place among countries with the most startups. We have more than 2,400 startups,” Rudy Salahuddin, a deputy at the Coordinating Ministry for Economic Affairs, told the 2023 Open Finance Summit in Jakarta on Wednesday.
Startup Ranking data shows that the US is in the lead with 74,944 startups. Followed by India (15,405) and the UK (6,833). Canada and Australia have 3,712 and 2,638 startups, respectively. In sixth place is Indonesia with 2,486 startups. This makes Indonesia the only ASEAN member in the top 10 countries with the most startups. Startups in ASEAN member Singapore reach 1,103, putting the country in 11th place.
Rudy also told the conference that many Indonesian unicorns came from the e-commerce and financial technology (fintech) sectors.
According to Rudy, Indonesia last year also accounted for $77 billion, or around 40 percent of the digital transaction value in the ASEAN region. The number is forecast to jump by twofold to $130 billion in 2025.
“Investment in the digital sector is on the rise. We have secured $3 billion worth of investment deals [in the digital sector]. This is the second-highest after Singapore,” Rudy said.
Despite the great internet economy prospects, there still lie many areas that Indonesia needs to work on. Indonesia’s internet penetration has only reached 76 percent of its population. Only 51.8 percent of Indonesians aged older than 15 years have bank accounts, much lower than in Asia-Pacific countries. Indonesia’s micro, small and medium enterprises (MSMEs) still struggle to access financing, according to Rudy.
“However, e-commerce and fintech transactions continue to be on the rise. The digital gap and low financial inclusion become an area that digital players, particularly e-commerce and fintech, can try to tap into,” Rudy said.
https://jakartaglobe.id/tech/indonesia-ranks-sixth-among-countries-with-most-startups
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