Iraq posts $5bn deficit as oil disruption piles pressure on budget
Iraq recorded a fiscal deficit of $5 billion in the first four months of 2026 after the Iran war severely curtailed oil export revenues, heaping pressure on the new government to pass a budget it has yet to approve.
Spending over the period stood at $28.2 billion against revenues of $23.2 billion, according to the finance ministry. Oil revenues accounted for $19.4 billion of total income, with the remainder coming from customs duties and government fees. Civil servant wages were the single largest item of expenditure at $15.3 billion — more than half of all spending.
"There is a pressing need for the new government to work to release a full budget because the delay will hurt growth and projects," said Nabil Al-Marsoomi, an economics professor at Basra University. "The absence of a budget limits the government's ability to confront the financial crisis, as its approval provides legal cover for internal and external borrowing, as well as liquidity management through the central bank."
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Muhammad Ali Bandial