Baghdad (IraqiNews.com) – Iraq plans to allocate 20 trillion Iraqi dinars (about $15 billion) in its draft 2027 budget primarily to complete delayed projects while entirely blocking funds for new projects.
The state budget approach indicates a clear shift toward performance-based expenditure, cost savings, and meeting long-term infrastructure obligations.
The entire capital expenditure portion of the budget focuses on revitalizing infrastructure. Mazhar Saleh, the financial adviser to Prime Minister Ali al-Zaidi, stated in an interview with Iraq’s official newspaper al-Sabah that there will be no funding allocated for new development projects.
The proposed budget offers a low-risk average oil price target of $60 to $70 per barrel.
Hospitals, schools, bridges, tunnels, and water networks are among the critical public services targeted by the multibillion-dollar commitment.
Following the decision to skip a formal 2026 budget due to regional disturbances, the Iraqi parliament’s financial committee anticipates the official 2027 draft being submitted for approval between late October and early November 2026.
While focusing on current projects gives a more direct path to infrastructure improvement, Iraq is reorganizing its budget due to severe financial pressures.
The Iraqi Ministry of Finance is working with the World Bank to shift from traditional line-item expenditure to a program-and-performance approach.
Iraq’s budget deficit exceeded 21 trillion Iraqi dinars (approximately $16.1 billion) in the first half of the year due to huge governmental payroll expenditures. As a result, more than 1,800 development projects have been canceled or suspended.
Military operations in the region and shipping restrictions via the Strait of Hormuz have slashed marine crude exports, which account for more than 85 percent of state revenue.
To secure cash for the 2027 budget, Baghdad has allowed three-month temporary marketing mechanisms to diversify export outlets and is focusing on pipelines through Turkey and Syria to increase oil exports.