The 2026 budget is under threat… signs of a lack of approval amid a growing financial crisis.
The 2026 budget is under threat… signs of a lack of approval amid a growing financial crisis.
6-19-2026
The issue of the general budget in Iraq is once again at the forefront of controversy, with increasing indications that a budget for 2026 may not be approved, given the complex financial and economic challenges, including declining oil revenues, the stumbling of some executive processes in the government, and regional effects on export activity.
These data open the door to questions about the future of public spending, the state’s priorities, and its ability to manage the financial deficit during the next stage, as MP Mudhar Al-Karawi confirmed today, Friday (June 19, 2026), that all indicators point to the absence of a general budget for 2026, in light of the current financial and economic conditions that the country is going through.
Al-Karawi told Baghdad Today, “All indicators point, without a doubt, to the fact that 2026 will not witness the approval of a budget, especially in light of the difficult and critical financial and economic conditions,” explaining that “the current government has not yet completed its structure, with nine ministerial portfolios remaining vacant.”
He added that “in the coming weeks, a comprehensive report will be submitted from the Ministry of Finance to the Parliamentary Finance Committee, explaining the nature of the financial situation in the country, and the proposed solutions to address the deficit and Iraq’s inability to export its oil during the past three months.”
He pointed out that “Iraq’s revenues from oil sales have declined by large percentages, which may reach 95% or more, and this will have direct repercussions on the financial and economic situation,” noting that “the priority now will be focused on the issue of salaries, while strategic projects and the evaluation of hundreds of existing projects will be subject to re-examination and the determination of spending priorities.”
Al-Karawi added that “the option of borrowing is still premature at the moment, pending an accurate and objective reading of the size of the deficit and the upcoming government measures, especially what the Ministry of Oil will take regarding crude exports,” noting that “the relative improvement in regional tensions may give greater flexibility to the movement of tankers in the Strait of Hormuz, which will be reflected in the export file.”
The Iraqi economy is almost entirely dependent on oil revenues, making it highly vulnerable to any disruptions in crude oil prices or exports.
In recent years, the process of preparing and approving public budgets has faced repeated challenges as a result of political disputes, economic fluctuations, and changes in production and exports.
Regional crises, including tensions in the region and their impact on shipping lanes and oil exports, have also contributed to increased pressure on public finances.
Under these circumstances, Iraqi governments have resorted to temporary solutions to manage spending, focusing on securing salaries and basic services, amid ongoing debate about the need for deeper economic and structural reforms to ensure long-term financial stability.
burathanews.com
