Analysis and Measurement of the Impact of Oil Price Fluctuations on the Structure of Public Expenditures in Iraq for the Period 1980-2018

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Alhaidari Jabar Sadoon Darag, Kiomars Sohaili, Ali Falahati, Younes Goli


The Iraqi economy is considered one of the rentier economies, which depends mainly on oil revenues, which makes the financial policy very vulnerable to the changes taking place in oil prices, knowing that Iraq has undergone many economic transformations during the study period, during the period of the eighties there were no effects on the Iraqi economy, either The period of the nineties is the period of the economic blockade that continued until the end of the nineties, which witnessed the impact of the economic blockade as a result of replacing oil for food and medicine. As for the third period, it is the period of regime change from 2003 to 2018 as a result of the American occupation of Iraq that caused the destruction of The Iraqi economy as infrastructure as well as the entire economic projects almost destroyed.

There are several factors that contribute to changing oil prices, the most important of which is the rate of economic growth. The higher the rate of economic growth of the countries of the world, the higher the world oil price and vice versa. The public expenditures (current and investment) in Iraq during the study period were affected by the change in oil prices afterthe economic analysis was used to indicate the extent of the public expenditures being affected and variation in shocks that occur to oil prices, and the study concluded that oil price fluctuations have more impact on investment expenditures compared to current expenditures  , and this is evidence of the intensity of the sensitive investment expenditures compared to the current expenditures in Iraq, and this in turn reflects negative effects on other economic sectors such as the agricultural, industrial and tourism sectors.

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