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Iraq’s 2027 federal budget will prioritise high-impact investment projects, strengthen fiscal sustainability and advance economic reform, according to Mudher Mohammed Saleh, financial advisor to the Iraqi government.
Saleh told Zawya Projects that the budget is being prepared under a reform-focused framework that will give priority to investment projects with strong economic and developmental benefits while improving the efficiency of public spending and resource management.
The 2027 budget will also seek to protect social spending, particularly programmes supporting vulnerable groups, while promoting revenue diversification, reducing dependence on oil income, supporting government digitalisation initiatives and enhancing the economy’s ability to withstand external shocks.
According to Saleh, Iraq’s public finances faced exceptional challenges in 2026 due to geopolitical developments that disrupted global energy markets, supply chains and international trade. These factors placed pressure on oil revenues, which remain the main source of government income.
Despite delays in approving the federal budget, government spending has continued under the provisions of the Federal Financial Management Law No. 6 of 2019.
Article 13 of the law authorises the Ministry of Finance to release monthly allocations equivalent to one-twelfth of the previous year’s actual current expenditure, excluding non-recurring expenses, until a new budget is enacted.
Saleh said the mechanism has ensured the continued payment of salaries, wages, pensions and social welfare benefits, while also allowing funding for ongoing investment projects based on actual progress achieved, subject to available liquidity and anticipated budget allocations.
He added that any financing obtained through borrowing to support government expenditure represents a financing gap, underscoring the importance of strengthening public revenues, improving spending efficiency and maintaining fiscal sustainability.
He noted that the budget’s priorities are aligned with Iraq’s financial strategy, public financial management reform programme and Iraq Vision 2035, which aims to build a diversified and sustainable economy capable of delivering long-term growth, development and fiscal stability.
(Reporting by Majda Muhsen; Editing by Anoop Menon)
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