Expenditures exceed revenues… a financial crisis awaits radical solutions from the next government.
Expenditures exceed revenues… a financial crisis awaits radical solutions from the next government.
2-3-2026
The caretaker government has struggled in recent months to disburse salaries to public sector employees and other eligible groups. Funding has been significantly delayed, particularly in January, when salaries were postponed for approximately 10 days. This has generated considerable discontent among those entitled to their pay. Meanwhile, relevant authorities have offered numerous excuses that are unacceptable to all those awaiting their monthly salaries. Political figures assert that expenditures exceed revenues entering the state treasury, creating an imbalance in funding.
Former MP Mu’in al-Kadhim told Al-Ma’louma, “The incoming government must find solutions to address Iraq’s financial situation by implementing a series of measures to increase state revenues and ensure the payment of salaries and operational expenses.”
He added, “Expenses exceed 8 trillion dinars monthly, which necessitates the new government ensuring that revenues surpass this figure to prevent a financial crisis that could jeopardize salary payments.”
He explained that “Iraq faces major challenges related to its financial situation, which necessitates that the next government find radical solutions that raise the value of revenues, especially non-oil revenues, while creating a comprehensive plan that ensures reducing unnecessary expenditures in order to avoid burdening the budget with more expenses.”
For his part, economist Mustafa al-Faraj told Al-Maalomah that more than 60% of consumption in Iraq depends directly on the fixed monthly income of employees and retirees. He explained that any delay in salary payments immediately impacts citizens’ purchasing power, leading to a clear recession that begins with non-essential goods and gradually extends to include food items.
He added that the repercussions of this recession are not limited to citizens alone, but also place significant pressure on shop owners and small merchants, slowing down the flow of money within the economy. This, in turn, negatively affects commercial activity and state tax revenues. He pointed out that the salary delays are primarily due to a liquidity shortage resulting from the country’s financial deficit, in addition to the fact that internal debt has reached more than 80 trillion dinars. He warned that the liquidity crisis could recur monthly and permanently affect employee salaries if the financial imbalance is not addressed.
The Central Bank had previously confirmed an increase in expenditures compared to public revenues during the first ten months of 2025, as detailed in a statistic that was reviewed by Al-Maalomah. The Information Agency reported that “public revenues during the first 10 months of the year amounted to 104 billion and 434 million dinars, compared to public expenditures of 115 billion and 535 million dinars. These revenues were distributed between tax revenues of 4.809 billion dinars and other revenues of 99.625 billion dinars.” The report added that “public expenditures included current expenditures of 96.378 billion dinars and investment expenditures of 19.157 billion dinars.”
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