The Prime Minister’s advisor: Adopting the borrowing and grants law does not represent a permanent alternative to the budget.
The Prime Minister’s financial advisor, Mazhar Muhammad Salih, confirmed on Tuesday that the adoption of the borrowing and grants law is a temporary measure to ensure the continuation of spending until the budget is approved, and does not represent a permanent alternative to the general budget. He pointed out that the volatility of oil prices and the expansion of expenditures reinforce the need for borrowing to cover the deficit and secure the necessary financing. Salih told the official news agency that “if the borrowing and grants law is adopted as an alternative to the budget law, the government will resort to a temporary financing mechanism that allows it to continue to cover basic expenditures and fulfill its financial obligations until the general budget is approved.”
He added that “this mechanism includes domestic borrowing through the issuance of treasury bills or bonds subscribed to by local banks and financial institutions, and may also include external borrowing from international financial institutions or donor countries, as well as benefiting from international grants provided by regional and international bodies to finance specific projects or sectors.”
He explained that “the nature of financing is not necessarily limited to domestic borrowing, but is determined according to the size of financing needs, the availability of liquidity, the cost of borrowing, and the legal framework that allows the government to use these tools.”
He also pointed out that “resorting to this option instead of passing the budget law is often linked to the delay in the budget and the resulting lack of the necessary legal cover for government spending, which pushes the government to look for temporary financing tools that ensure the continued payment of salaries, the financing of public services, and the implementation of urgent financial obligations,” indicating that “weak liquidity or a decrease in public revenues, especially in light of fluctuating oil prices and the expansion of expenditures, may be an additional factor that reinforces the need to borrow to cover the deficit and secure the necessary financing.”
He also pointed out that “adopting the borrowing and grants law is not a permanent alternative to the budget, but rather represents an exceptional and temporary measure aimed at ensuring the continuity of the work of state institutions until the completion of the constitutional and legislative procedures for approving the general budget.”
Burathanews.com