2025-10-05T22:08:30+00:00
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Shafaq News
Delays in submitting Iraq’s 2025 budget to parliament could
exacerbate the country’s financial and economic crisis, three Iraqi economic
experts warned, citing risks of slowed investment, weakened trade, and a
possible recession in the coming months.
The experts, speaking to Shafaq News Agency, criticized the
government for failing to send the budget tables so far and for not taking
clear steps to reprioritize spending.
Kazem Al-Shammari, a member of the Parliamentary Economic
Committee, stressed that the budget is not merely a matter of approval or
voting, highlighting that it determines financial allocations for investment
projects and essential services, such as social welfare and the food ration
card, which affect the largest segment of the population.
While warning that the delay directly affects the
government’s ability to meet its obligations to citizens, he emphasized that
the Parliament has repeatedly urged it to submit the budget tables, yet these
calls have gone unanswered.
“The government is clearly failing in its constitutional
duties,” Al-Shammari clarified.
Recession Threat
Iraq’s 2025 budget, one of the largest in the nation’s
history at 198.9 trillion Iraqi dinars (around $153 billion), was approved in
June 2023 and designed to cover fiscal years 2023 through 2025 with the same
allocations each year, unless amended by the cabinet and approved by lawmakers.
Earlier, Finance Minister Taif Sami highlighted unresolved
conflicts with the Kurdistan Regional Government (KRG) over oil contracts and
revenue-sharing as a major obstacle. Compounding the issue, recent legislative
changes in the Kurdistan Region affecting oil agreements have further delayed
the submission of financial tables needed for the finalization of the 2025
budget.
Ahmed Eid, an economic researcher, warned that the delay is
affecting the national economic cycle. “The budget is the main driver of the
national economy. Without it, projects halt, job opportunities shrink, and cash
flow declines,” he observed.
Eid emphasized that the absence of a clear financial vision
has created market stagnation, unsettled investors, and weakened the capacity
of both public and private sectors to finance production and services.
Highlighting the broader economic implications, he stressed
that stimulating markets and boosting development are essential to reducing
unemployment and improving public services. The release of year-end financial
data, Eid noted, is a crucial step to achieve these goals.
Policy Shortcomings
Economic expert Mustafa Al-Faraj described the delay as a
clear violation of the 2023 three-year Federal Budget Law, which mandates
annual budgets be approved at the start of each year.
“The budget was approved based on $70 per barrel of oil, but
prices have fallen below $65. This requires revising spending plans and cutting
excess expenditures,” Al-Faraj emphasized.
He pointed out that the absence of adjustments despite oil
price fluctuations exposes governmental shortcomings in financial management,
particularly given that Iraq’s economy relies on oil exports for more than 90%
of revenue.
Stressing that the delay has caused market stagnation and
affected wide social groups, including employees, retirees, contractors, and
investors, Al-Faraj attributed the problem to ongoing political disputes
between the government and parliament, identifying this as the primary cause of
the hold-up, especially as the current parliamentary term approaches its
conclusion.
Read more: Iraq’s budget: political fiscal gaps threaten national stability in 2025
Salaries Still Flow
In contrast, economist Karim Al-Hilu downplayed concerns
about a slowdown, offering a different perspective.
“Monthly salaries continue to be paid, representing
two-thirds of the budget, and are directly injected into markets through
spending and circulation,” Al-Hilu confirmed.
He added that foreign remittances remain open, goods are
available both locally and from imports, noting that government investment
projects in Baghdad and other provinces have continued, supporting the
industrial and construction sectors.
“The real challenge is not the absence of a budget, but the
lack of genuine support for domestic products facing unfair competition from
imports,’’ Al-Hilu concluded.
Written and edited by Shafaq News staff.
