Iraq’s budget faces restructuring after the exchange rate change; two weeks to finalize the calculations.
Iraq’s budget faces restructuring after the exchange rate change; two weeks to finalize the calculations.
10-14-2026
Information/Report…
The Central Bank’s change in the dollar exchange rate, and the approval of political parties and parliamentary bloc leaders for this decision, necessitates that the government amend the budget in light of the new dollar-dinar value. Political figures have confirmed that both the government and parliament need more time to finalize the budget according to current changes and developments, ensuring that amendments are made before proceeding to a vote in the House of Representatives. Despite the government’s recent decisions regarding the dollar, which have faced criticism for not benefiting citizens but rather aiming to bolster the budget with additional revenues, the government’s recent decisions have not been in the citizens’ best interest.
In this regard, former member of the parliamentary finance committee, Mohammed al-Shabaki, told Al-Maalouma, “The budget rests on two factors: the dollar exchange rate and the price of a barrel of oil. The latter is unpredictable given the current situation and its rapidly evolving developments, especially those related to the Strait of Hormuz and the regional crisis.”
He added that “the projections in building the budget take into account projections for a period of 3 years, but in Iraq annual indicators are calculated because the budget changes every year,” noting that “reducing the value of the local currency against the dollar is considered a decision outside the budget.”
He explained that “changing the exchange rate means the government will restructure the budget based on the new rate, resulting in a difference between revenues and expenditures,” predicting that the government will take at least two weeks to restructure the budget according to the new rate.
For his part, MP Uday al-Zamili confirmed to Al-Maalomah that “the budget will be studied in detail, with proposals being put forward concerning the poor and those with limited incomes, with the aim of alleviating the burdens of living that have worsened as a result of rising prices.”
He added that “the proposals will include multiple segments, including farmers, graduates, and workers, in addition to supporting investment and stimulating economic sectors, especially since Iraq’s continued reliance on its current economy could exacerbate economic challenges.”
He pointed out that “the country needs to move from a rentier economy that depends primarily on oil sales to a diversified economy that possesses strong productive capabilities and is able to achieve development and provide job opportunities,” noting that “stimulating the economy requires a review of the current economic policies.”
In a related context, crisis expert Ali al-Fariji criticized the government’s move to raise the value of the dollar against the dinar, pointing out that this decision Raising the exchange rate may provide quick liquidity, but it does not constitute financial reform in itself.
Al-Fariji told Al-Maalomah, “Raising the exchange rate may provide quick liquidity, but it does not represent financial reform in itself. True reform lies in building a diversified revenue system, recovering funds and assets, reducing waste, and transforming the economy from dependence on oil and the dollar to a financial management system that measures results and creates real and sustainable revenues.”
He added, “The 19.2 trillion dinars expected from the dollar’s revaluation should be viewed as an approximate total book revenue, not a net gain for the treasury, because part of its impact may rebound on the state itself in the form of increased spending and import costs.”
He added, “Maximizing revenues requires recovering Iraqi funds and assets, and establishing a specialized institutional framework to track and recover funds and assets proven to have been illegally transferred after 2003. This also necessitates reassessing files related to the funds and assets of the former Iraqi state. What is needed here is not political rhetoric, but a unified database of assets, verification of their ownership, tracing of their financial flows, and activating legal and international mechanisms to recover or freeze them through laws and agreements.”
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