The Kurdistan Region recorded a persistent 2.7 trillion Iraqi Dinar ($2.05 billion) budget deficit between 2019 and 2025, driven by structural shortfalls between public revenues and actual expenditures.

The Ministry of Finance and Economy has released a comprehensive operations and activities report spanning 2019 to 2025. The final trial balance data reveals a persistent annual deficit in the Kurdistan Region's overall fiscal balance. 

According to the released data, the Kurdistan Region accumulated total revenues of 84.8 trillion Iraqi Dinars (IQD) through combined domestic streams and federal transfers over the seven-year period. However, actual public expenditures outpaced income, hitting 87.5 trillion IQD. 

While the reported fiscal gap stands at 2.7 trillion IQD, this baseline figure does not account for unpaid public salaries now held as state debt. 

The calculation also omits key suspended expenditures from the 2019–2025 period, such as outstanding dues to contractors and electricity production entitlements. This indicates a much larger actual deficit.

Oil and Customs Drive Majority of KRG Domestic Revenue 

Between 2019 and March 2023, oil revenues deposited directly into Ministry of Finance accounts reached approximately 22.5 trillion IQD. This represents 44% of the Region’s total domestic revenue and funded 26% of its actual expenditures. 

Meanwhile, customs and border crossing revenues generated 9.5 trillion IQD, accounting for 19% of all non-oil revenues while covering 11% of total actual spending. Tax and state property revenues contributed a further 5.4 trillion IQD, making up 11% of the non-oil budget and meeting 6% of the Region's actual expenditures. 

Finally, miscellaneous revenue streams brought in 13.8 trillion IQD, comprising 27% of non-oil income and covering 16% of total actual public expenditures.

KRG Revenues Covered Just 59% of Expenditures 

Official figures from the Ministry demonstrate that combined oil and non-oil revenues in the Kurdistan Region from 2019 to 2025 covered a mere 59% of total actual expenditures.

Consequently, aggregate annual revenues fell short of meeting the Region's financial obligations.