The dialectic of the relationship between oil revenues and public budget in Iraq for the period (2004-2022)

Abstract

The Iraqi economy is considered a rentier economy, which relies on oil revenues to finance it, necessitating studying the dialectical relationship between oil revenues and the public budget in Iraq, as the research dealt with analyzing the relationship between them during the period (2004-2022). The research also deals with analyzing the impact of fluctuations in oil prices on the public budget, with a focus on periods that witnessed financial surpluses due to rising prices, and financial crises resulting from declining oil revenues. The deductive approach and the descriptive analytical method of economic data were used to reach the nature of the relationship that links economic variables during the period studied, as the research concluded that public budget suffers from great fragility in the face of changes in oil prices, which leads to a financial deficit when prices fall, and unsustainable surpluses when they rise, as the research discusses the impact of this dependence on the stability of public finances and the national economy. The research reached several conclusions, most notably the necessity of reducing dependence on oil by diversifying sources of revenue and enhancing the role of non-oil sectors. It also proposes a set of recommendations, including establishing a sovereign fund to manage financial surpluses, reforming the tax system, and adopting more sustainable financial policies to address oil fluctuations.