Iraq budget deficit widens to 32.8 trillion dinars through September 2026

The Ministry of Finance in Iraq. Photo: Wikimapia Baghdad (IraqiNews.com) – Official budget execution figures released by Iraq’s Ministry of Finance for the first nine months of 2026 revealed a widening fiscal deficit of 32.858 trillion dinars, driven by a sharp drop in hydrocarbon returns and the continued dominance of mandatory operational expenditures. According to treasury disclosures, aggregate state revenues through late September 2026 reached 52.822 trillion dinars, against total public expenditures of 85.680 trillion dinars. Hydrocarbon revenues constituted 76% of total treasury receipts, generating 40.202 trillion dinars, while non-oil revenues contributed 12.620 trillion dinars, or roughly 24% of state income. Operational spending categories consumed the vast majority of resources, with public-sector payroll obligations (employee compensation) totaling 46.135 trillion dinars—effectively absorbing 87.3% of all state revenues collected during the period. Social welfare transfers ranked second at 20.572 trillion dinars, followed by subsidies, grants, debt interest, and incidental outlays at 7.601 trillion dinars. Commodity procurement totaled 3.007 trillion dinars, service requirements accounted for 203.9 billion dinars, and asset maintenance spending stood at 57.7 billion dinars. On an annualized basis, federal revenues experienced a steep 42.1% contraction, dropping by 38.347 trillion dinars from the 91.168 trillion dinars recorded during the corresponding period in 2025. The decline was heavily precipitated by a 50.8% plunge in crude oil earnings, down from 81.749 trillion dinars in 2025. Conversely, non-oil domestic revenues registered a 34% increase, rising from 9.420 trillion dinars to 12.620 trillion dinars—a fiscal expansion driven by enhanced customs and tax enforcement, though still insufficient to offset high public payroll allocations.