The Impact of Oil Price Change on the Public Budget and Balance of Payments in Iraq During the Period (1990-2021)

Abstract

Iraq is one of those countries that relies heavily on oil income to mobilize funds and maintain external balance. Oil’s increase or fall has a direct impact on Iraq’s public budget and balance of payments, as well as the country’s development. This study intends to explain how to calculate the impact of changing oil prices on Iraq’s Public budget and balance of payments over time (19902021-). The research relied on a descriptive and analytical methodology based on time series data, as well as the employment of (FMOLS, DOLS) and (OLS) approaches, to achieve this purpose. Finally, the study came to several conclusions, including: Despite the wars and political and security instability, oil prices had a positive impact on both the general budget and the balance of payments in Iraq, as the rise in oil prices contributed positively to the general budget and balance of payments during the period (1990202-), and as a result, Iraq needs to work on economic diversification and diversify its sources of revenue.