Baghdad – Iraq’s federal budget for the next three years has been designed with flexibility in mind to ensure it can meet essential financial commitments despite global economic uncertainties, according to the financial adviser to the Prime Minister.
In a recent interview, Muthar Mohammed Saleh explained that the 2025 budget is structured using a dual-limit financial policy. This approach allows for adjustments in spending based on the fluctuating revenues from oil exports. The budget’s upper spending limit is set at 200 trillion dinars (around $136.1 billion), while the lower limit is 150 trillion dinars (approximately $102.1 billion).
The budget assumes an oil price of $70 per barrel, and under this scenario, a theoretical deficit of 64 trillion dinars (about $43.5 billion) would exist at the maximum expenditure level. However, concerns have arisen that a significant drop in global oil prices could create challenges for the government, particularly in meeting essential obligations like public sector salaries. Given Iraq’s heavy reliance on oil exports, any prolonged fall in oil prices could strain the government’s ability to cover its financial needs without resorting to alternative revenue sources or borrowing.
