An economist identifies 5 obstacles facing Iraq’s 2027 budget and warns of a 60 trillion dinar deficit.
Economic expert Nabil Al-Marsoumi identified five major obstacles facing Iraq’s budget for next year on Wednesday, while warning of a financial deficit that could exceed 60 trillion Iraqi dinars. Financialnews subscription
In a post on social media, Al-Marsoumi addressed those obstacles, explaining that the first of them lies in the difficulty of estimating the price of a barrel of oil and the quantities exported from it, in light of the current circumstances in the region related to the closure of the Strait of Hormuz, and the lack of clarity regarding the time period in which these conditions will continue.
The second obstacle, according to the expert, is “the difficulty of financing the planned budget deficit, which may exceed 60 trillion dinars, in light of the large increase in internal debt and the limited possibility of obtaining large external debt.”
As for the third difficulty, it is “the Kurdistan Region’s share of the budget,” which Al-Marsoumi explained has increased, based on the latest general population census, to 14.1%, amounting to 29 trillion dinars.
Regarding the fourth difficulty, the economist confirmed that it is represented by “the file of appointments, the regularization of contracts and workers, and the financial obligations due to employees for more than a year.”
In the last point, Al-Marsoumi pointed to the “financial allocations for the Ministry of Oil, which will increase significantly due to the application of the new economic model for pricing domestic oil allocated for local consumption.”
This statement comes as the Iraqi Ministry of Finance intends to send the draft general budget law for 2027 to the House of Representatives on October 15, according to what Jamal Kojar, a member of the parliamentary finance committee, told Shafaq News Agency on Monday.
The advisor to the Iraqi Prime Minister for Financial Affairs, Mazhar Muhammad Salih, had previously revealed that the Ministry of Finance had begun preparing the draft federal general budget law for 2027, in the first new budget that Iraq has begun preparing after two years of the absence of financial approval.
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 for 2026 approved, despite the House of Representatives 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 and governing expenses.
The 2026 budget was also not approved due to 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 the new federal budget.
Shafaq.com