Economic Analysis: Comparison of Iraqi Revenues and Expenditures in the First Months of 2024 and 2023
Economic Analysis: Comparison of Iraqi Revenues and Expenditures in the First Months of 2024 and 2023
8-30-2024
Researcher Shaza Khalil*
The first months of 2024 have seen significant shifts in Iraq’s revenues and expenditures compared to the same period in 2023, reflecting the economic changes led by Iraqi Prime Minister Mohammed Shia al-Sudani and his government. This analysis aims to review these changes and assess their impact on the Iraqi economy.
Iraqi revenues, oil and non-oil revenues: Data indicate a decrease in the contribution of oil revenues in 2024 to 89.1% compared to 99.23% in 2023. This decrease is attributed to the success achieved by the government in increasing non-oil revenues, reflecting clear efforts to diversify sources of income and reduce dependence on oil.
Income and wealth tax revenues: The contribution of income and wealth taxes increased from 1.44% in 2023 to 2.1% in 2024. This increase reflects increased economic activity and improved efficiency of the tax system in Iraq, indicating the success of government policies in this area.
Commodity taxes and excise duties: These revenues witnessed a significant increase, rising from 0.87% in 2023 to 2.4% in 2024. This increase indicates a clear improvement in the tax system and an increase in tax compliance, which enhances the government’s role in providing the necessary resources for development.
Second: Iraqi expenditures Current and investment expenditures:
Although current expenditures increased from 87.4% in 2023 to 90.0% in 2024, investment expenditures decreased from 12.6% in 2023 to 10.0% in 2024. This shift reflects the financial challenges facing the government, which may be due to the need to finance the deficit or direct expenditures towards other priorities.
Economic Analysis, Revenue Diversification: The increase in non-oil revenues reflects a remarkable success in the government’s strategy to diversify sources of income, which enhances the stability of the Iraqi economy and protects it from fluctuations in global oil prices.
Challenges in spending: Despite the increase in revenues, challenges remain in how to direct spending. Increased spending on debt service and declining investment spending may hinder sustainable development, requiring the government to re-evaluate its fiscal strategies to better allocate resources.
The future of the Iraqi economy: If the government continues its efforts to boost non-oil revenues and improve expenditure management, the Iraqi economy is expected to witness more stable growth in the coming years. However, public debt management and directing expenditures towards more productive sectors remain challenges that must be addressed to achieve sustainable economic development.
In conclusion, the first months of 2024 are an important turning point in the path of the Iraqi economy, as the government has managed to achieve progress in diversifying revenues despite ongoing challenges in managing spending. Continuing these reforms will be essential to enhance economic stability and ensure a better future for Iraq.
Economic Studies Unit / North America Office
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