A new year without a budget… The 1/12 system is back in operation and awaits the formation of the new government.
A new year without a budget… The 1/12 system is back in operation and awaits the formation of the new government.
12-28-2025
Information/Baghdad…
The current year will end in a few days, and Iraq will enter its new year, 2026, without a budget legislated in the House of Representatives. In the absence of a government and its entry into the caretaker phase, Iraq will enter the phase of working on the 1/12 system, which will remain in effect until a new budget is legislated by the government whose formation date is still unknown, due to the continuation of conflicts and political competition between the various forces over presidential positions, which delays the passage of the budget for a period that may exceed the middle of next year.
Member of Parliament’s Finance Committee, Mu’in al-Kadhimi, told Al-Ma’louma, “The next year, 2026, will be among the new government’s priorities and duties, including enacting the budget law, and the vote on the aforementioned law may be delayed until the middle of next year.”
He added that “the process of forming the government and then working on submitting the budget by the Ministry of Finance and Planning to the Council of Ministers for approval and then sending it to the House of Representatives for the purpose of legislating it, are all factors that delay the legislation of the budget.”
He explained that “next year’s budget will be a single-year budget, unlike the previous three-year budget, where the first six months of next year will be spent according to the 1/12 system of last year, and then the budget will be implemented in the second half of next year.”
For his part, MP Jamal Kojar, a member of the parliamentary finance committee, explained to Al-Maalomah that “the delay in forming the government will mean spending on salaries only according to the 1/12 mechanism and paying advances to the governorates to cover the governing expenses, according to the Financial Management Law.”
He continued: “The approval of the 2026 budget has become contingent on the swift formation of the government within the constitutional deadlines, as any delay will disrupt the budget and keep spending within its basic limits only,” noting that “preparing a new three-year budget is currently unlikely due to a number of factors, most notably the continuous fluctuations in oil prices, on which the state depends for more than 90% of its revenues.”
In a related context, economist Dirgham al-Haidari told Al-Maalomah that “the most prominent challenges of the next phase lie in the inability to determine oil prices and export volumes due to political and security fluctuations in the region, in addition to the lack of a clear vision regarding non-oil revenues.” He pointed out that “the delay in forming the three presidencies and the government will have a direct impact on the preparation of the next budget,” predicting that the 2026 budget will not be approved and that the state will only be able to disburse salaries and essential expenditures.
almaalomah.me
