Exclusive: Parliamentary Finance Committee reveals gradual shift in Iraqi budget starting in 2027
Hussein al-Daraji, a member of the Finance Committee in the Iraqi Parliament, revealed on Wednesday that the legislative and executive authorities intend to gradually move towards implementing a “programs and performance budget” starting from next year, 2027, to ensure the regulation of spending and the protection of public funds. MiddleEast news
Al-Daraji told Shafaq News Agency in a special statement that the Parliamentary Finance Committee hosted Finance Minister Falih al-Sari last week to discuss the fundamental amendments to the draft budget law, where the change to the current work mechanism and the shift towards a “program budget” was discussed in detail.
Al-Daraji explained that the program budget for the year 2027 will include, in its first phase, the Ministry of Electricity and the governorates of Diwaniyah and Salah al-Din, indicating that the plan set for the 2028 budget will expand to include five ministries and five other governorates, so that the new structure will continue to be gradually generalized to the rest of the state institutions in subsequent years.
The member of the Finance Committee pointed out that the application of the program budget aims primarily to preserve public funds, and to control and regulate financial spending channels in accordance with the government’s strategic vision, specifically within the investment budget items.
This comes in conjunction with the Parliamentary Finance Committee hosting, on July 7, Finance Minister Faleh al-Sari and senior officials in the ministry, to discuss the financial and economic situation, and the mechanisms for preparing the draft federal general budget for 2027.
During the meeting, Uday Awad, Chairman of the Finance Committee, affirmed that the committee is committed to supporting and enacting laws that contribute to addressing financial challenges, developing non-oil resources, and enhancing the state’s financial sustainability.
For his part, Al-Sari confirmed that the 2027 budget project includes a phased plan to implement the program and performance budget, starting with a number of governorates as a pilot model, to be gradually generalized to include all governorates of Iraq.
It is worth noting that the Cabinet had approved last June, under the direction of Prime Minister Ali Faleh Al-Zaidi, the formulation of a “program budget” in coordination and joint cooperation with the World Bank and the Parliamentary Finance Committee, to advance the economic reform process in the country.
Following that, the advisor to the Prime Minister for Financial Affairs, Mazhar Muhammad Salih, revealed that the Ministry of Finance has begun preparing the draft federal general budget law for 2027, in the first new budget that Iraq has begun to formulate after two years of not approving a federal budget.
The government’s commencement of preparing the 2027 budget comes after two years of the absence of an effective federal budget with approved schedules, as the 2025 budget schedules were not approved, nor was a budget law approved for 2026, despite the House of Representatives, under the government of former Prime Minister Mohammed Shia al-Sudani, approving the three-year budget law for the years 2023, 2024 and 2025.
The 2025 budget, in its updated form, could not be implemented after its schedules were not approved within the House of Representatives and the fiscal year ended, which prompted the Ministry of Finance to adopt a temporary disbursement mechanism at a rate of 1/12, based on the Financial Management Law, to secure salaries, governing expenses and basic obligations.
The 2026 budget was also not approved due to the political complexities and economic pressures resulting from regional tensions and energy market volatility, so Iraq continues to manage its spending according to the temporary spending mechanism while awaiting a new federal budget that will end this financial deadlock.
Shafaq.com