A year ended without a budget… Iraq is on the verge of economic paralysis and a freeze on services.
Economic expert Ahmed Al-Tamimi warned on Tuesday (November 4, 2025) of serious repercussions that may result from the end of the 2025 fiscal year without the approval of the general budget, noting that continuing to work on the 1/12 monthly spending rule will lead to paralysis in investment and service projects within the country.
Al-Tamimi told Baghdad Today, “The failure to approve the budget will hinder the implementation of government programs, freeze vital projects in various sectors, and force ministries to operate in a transitional manner with limited powers, without the ability to launch new projects or complete those that have been halted.”
He added that “the provinces will be the biggest losers as a result of freezing the release of financial allocations, which will affect public services and job opportunities, and weaken the contribution of the private sector to local development,” noting that “the economic environment will face a decline in the confidence of local and foreign investors due to the absence of a clear financial vision.”
He explained that “the continuation of the current situation will create serious challenges to the state’s financial obligations, especially with regard to salaries, social safety nets and government support, which may lead to an exacerbation of the financial deficit and increased pressure on cash reserves,” calling for “urgent action to approve the budget and establish financial stability before the circle of economic crises widens.”
The Iraqi government is facing delays in approving the 2025 budget due to political and technical disputes over the distribution of revenues and allocations to the provinces. This has prompted the Ministry of Finance to continue with the 1/12 spending rule, meaning that monthly spending is based on the previous year’s budget, which limits the state’s ability to finance new projects and stimulate the economy.
Burathanews.com