The relationship between the general budget and economic growth in Iraq, “Foundations of Economic Reform”

Abstract

This research aims to analyze the behavioural trend of economic growth in line with fluctuations in the general budget and present a set of proposals and recommendations to financial policymakers to achieve economic diversification and reduce dependence on oil revenues after this trend worsened after 2003 as a result of the rentier orientation that established dependence on oil revenues with weak non-oil revenues. The research assumes that “there is a kind of parallelism and dependency in economic growth to the changes occurring in the deficit and surplus in the general budget.” To achieve this hypothesis, the deductive approach was used by relying on the analytical method for each of the components of the general budget with indicators of economic growth. We have concluded that the current trend of the general budget perpetuates the dependence of economic growth on fluctuations in crude oil, which means that the Iraqi economy is exposed to more shocks and financial fragility and that any approach to economic reform should be directed towards enhancing the contribution of non-oil revenues by paying attention to the non-oil output sectors to enhance the trends of development and economic diversification in Iraq.