Iraq’s parliament to discuss 2027 budget with $48.8 billion deficit

The Iraqi Parliament. Photo: AFP/Getty Images Baghdad (IraqiNews.com) – Iraq’s parliament is about to start official deliberations on the 2027 federal budget, which has a significant 64 trillion Iraqi dinar ($48.8 billion) deficit. Following the exclusion of a 2026 budget due to enormous political and economic challenges, the Iraqi Ministry of Finance has expedited the 2027 draft to meet the deadline for parliamentary submission. The new budget’s total expenditure is projected at roughly 200 trillion Iraqi dinar (approximately $152.6 billion), matching previous record-high spending levels. The 2027 budget represents a structural transformation by allocating 150 trillion ($114.5 billion) for traditional line items and 50 trillion Iraqi dinar ($38.2 billion) for a new World Bank-coordinated program-and-performance model to measure expenditure efficiency. Oil valuations in the new budget are based on a cautious benchmark price of $60 to $70 per barrel. Earlier this year, regional military tensions prompted Iran to temporarily close the Strait of Hormuz, negatively affecting Iraqi oil exports. At peak times of the crisis, Iraq’s monthly export volumes fell by almost 80 percent, resulting in tens of billions of dollars in lost income and a major public-sector salary issue. Despite liquidity concerns, the Iraqi government is sustaining massive fixed expenses, including plans to permanently transfer almost one million contract workers and daily wage earners to permanent public service positions. Additionally, tensions remain over allocations for the Kurdistan Regional Government (KRG). According to reports, Erbil seeks a 14 percent share of the national budget based on recent census figures. The Parliamentary Finance Committee is holding extensive preparatory briefings to look over non-oil income files, currency value, and social safety nets before the final document goes through its first reading.