Analysis of the General Budget and Public Debt in Iraq for the Period (2004-2022)

Abstract

The research focuses on the problem facing Iraq due to the crisis in its public budget, which has significantly affected many people—specifically, the public debt crisis and its pressure on economic resources to service these debts and avoid fiscal deficits in the public budget. The objective is to find optimal solutions while minimizing reliance on both internal and external borrowing.The research begins with the issue of indebtedness that has led to a deficit in the public budget. The central problem revolves around addressing this deficit through internal and external borrowing, which often produces counterproductive results. This approach exacerbates a separate but equally serious issue: the increase in indebtedness in Iraq during the study period.

The research proceeds from the hypothesis that there is a relationship influenced by fluctuations in public expenditures and revenues, which determine the net public budget in the form of either a surplus or deficit. This relationship has been vacant in the Iraqi general budget due to increased indebtedness throughout the study period, leading to a direct correlation between public debt and the net budget represented by the deficit.The research aims to identify the relationship between public debt and the net public budget, as well as its indicators. This requires an examination of the issues in this relationship and the extent of its impact on the general economy for the period (2004-2022).

The research gap arises from the need to understand the extent of the danger posed by public debt to the Iraqi economy. The research is divided into three sections: The first section analyzes the budgetary components of the Iraqi economy for the period (2004-2022), with the first requirement focusing on the analysis of public expenditure development. The second requirement addresses the analysis of public revenue development and the net public budget. The second section highlights the evolution of public debt and the deficit gap during the period (2004-2022), focusing on the growth of both internal and external public debt and its relationship to the net public budget. This section also examines the indicators of the burden of public indebtedness during the same period. The third section discusses the shocks affecting the Iraqi public budget for the period (2004-2022), concluding with findings and recommendations.

The results of the study indicate that the public budget deficit is directly related to public indebtedness, whether internal or external, stemming from the negative imbalance between the growth of public expenditures and public revenues. This imbalance reflects the reciprocal impact of their growth on one another, leading to increased borrowing levels exceeding the government's ability and the local economy's capacity to service the debt burden.The most important recommendation from this thesis is to develop a comprehensive database of processed data and solutions to study the challenges that Iraq has faced, particularly during the study period, and to understand how to prevent their recurrence in the future.