Font Size

- Aa +

Wed 2 Jul 2008 05:11 PM

Font Size

- Aa +

Iraq looks to hike budget 44% on record oil prices

Finance ministry wants to raise 2008 budget to $70bn to rebuilt infrastructure.

Iraq's finance ministry wants to raise its 2008 budget by 44 percent to a record $70 billion, cashing in on record oil prices to rebuild shattered infrastructure, the government's spokesman said on Wednesday.

The ministry's submission of a supplementary budget of $21 billion - on top of February's 2008 budget of $48 billion - comes as prices for Iraq's main export oil hits record highs.

"This enhanced budget that results from the stability in Iraq's oil exports... will have tangible positive effects on the provision of basic services in the country," government spokesman Ali Al-Dabbagh said in a statement.

The draft supplementary budget would be discussed by the economic committee of Iraq's cabinet then put before parliament, Al-Dabbagh said without giving a timeframe.

Iraq has boosted oil output to more than 2.5 million barrels per day (bpd), the highest level since the US-led invasion in 2003. Exports are running at around 2.0 million bpd.

Oil Minister Hussain Al-Shahristani on Monday announced the opening of Iraq's giant oilfields - which hold the world's third largest reserves - to development by foreign oil firms.

Meanwhile violence has fallen to its lowest level in four years, opening the way for a major spending programme on basic services such as electricity and clean water.

Last week, the government said it would spend $100 million to rebuild the east Baghdad slum of Sadr City, which until recently was a stronghold for anti-American cleric Moqtada Al-Sadr's Mehdi Army militia. It is now under state control. (Reuters)