The latest plunge in oil prices has dealt a heavy blow to Iraq’s stagnating economy, threatening the new government’s ability to rebuild after the war with the Islamic State group and provide basic services to areas roiled by recent protests.

Brent crude oil, used to price international purchases, briefly rose above $85 a barrel in October but has since plummeted to less than $55 — a nightmare for a country like Iraq that derives 95 percent of its revenue from oil exports.

A $111.9 billion draft budget sent to parliament in October projects crude exports of 3.8 million barrels per day to be sold at $56 per barrel. The bill, which includes a 23 percent increase in spending, would leave a deficit of $22.8 billion.

FILE - Int this Feb. 14, 2018  file photo, (then) Iraqi Prime Minister Haider al-Abadi prepares for a donor's summit seeking billions of dollars to help rebuild Iraq after the war against the Islamic State group, at Bayan Palace in Kuwait City, Kuwait. (AP Photo/Jon Gambrell, File)
FILE – Int this Feb. 14, 2018 file photo, (then) Iraqi Prime Minister Haider al-Abadi prepares for a donor’s summit seeking billions of dollars to help rebuild Iraq after the war against the Islamic State group, at Bayan Palace in Kuwait City, Kuwait. (AP Photo/Jon Gambrell, File)
FILE - In this July 11, 2017 file photo, airstrikes target Islamic State group positions on the edge of the Old City, in Mosul, Iraq. (AP Photo/Felipe Dana, File)
FILE – In this July 11, 2017 file photo, airstrikes target Islamic State group positions on the edge of the Old City, in Mosul, Iraq. (AP Photo/Felipe Dana, File)
In this Dec. 18, 2018 photo, an un-finished bank building stands idle at a construction site in Baghdad, Iraq. (AP Photo/Karim Kadim)
In this Dec. 18, 2018 photo, an un-finished bank building stands idle at a construction site in Baghdad, Iraq. (AP Photo/Karim Kadim)
FILE - In this April 1, 2017 file photo, children play inside a damaged car, amid heavy destruction in a neighborhood recently retaken by Iraqi security forces from Islamic State group militants on the western side of Mosul, Iraq. (AP Photo/Felipe Dana, File)
FILE – In this April 1, 2017 file photo, children play inside a damaged car, amid heavy destruction in a neighborhood recently retaken by Iraqi security forces from Islamic State group militants on the western side of Mosul, Iraq. (AP Photo/Felipe Dana, File)
In this Dec. 18, 2018 photo, an un-finished bank building stands at an idle construction site in Baghdad, Iraq. (AP Photo/Karim Kadim)
In this Dec. 18, 2018 photo, an un-finished bank building stands at an idle construction site in Baghdad, Iraq. (AP Photo/Karim Kadim)

Source: The Associated Press

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