Iraq’s 2027 Budget Draft Advances With Kurdistan Salaries Included
At a Glance
- Iraq’s Finance Ministry has completed the draft 2027 federal budget and referred it to the Ministerial Council for the Economy for review.
- The preparation process included representatives from federal ministries, the Kurdistan Region and Iraq’s provinces, as well as financial experts.
- The Kurdistan Region has sought guarantees for regular salary payments and other constitutional and financial entitlements to be reflected in the federal budget.
- The budget is being prepared using a gradual program-and-performance budgeting approach, initially covering the electricity sector and Diwaniyah and Saladin provinces.
Iraq’s 2027 federal budget draft has moved into the next stage of government review after the Ministry of Finance completed its preparation and referred the bill to the Ministerial Council for the Economy.
The draft includes participation from the Kurdistan Region during the preparation process, while discussions continue over the Region’s financial entitlements, including public-sector salaries and other outstanding allocations.
Key Statement
“The dollar sale rate is currently 132,000 dinars per $100, and it will be adjusted,” Dilan Ghafoor, a member of the Parliamentary Finance Committee, told Channel8.
“The ministry has fulfilled its obligations to complete the draft budget within the specified timelines.”
— Faleh al-Sari, Iraqi Minister of Finance.
“The draft takes into account the priorities of the governmental program and economic and financial changes, spending priorities, and the needs of important community segments.”
— Iraqi Ministry of Finance.
Dollar Rate: Ghafoor told Channel8 that the current dollar sale rate stands at 132,000 Iraqi dinars per $100, and said the rate will be adjusted.
The exchange-rate figure should be treated as Ghafoor’s statement about the budget draft, rather than as confirmation that the Central Bank has announced a new exchange rate. The Central Bank’s current published information lists the U.S. dollar at 1,310 IQD on its displayed exchange-rate page, while its official bulletins have separately documented a 1,320 IQD maximum bank selling price.
Kurdistan Region Salaries
The Kurdistan Regional Government has made regular and timely payment of public-sector salaries one of its central demands in negotiations over the 2027 federal budget.
The KRG says its budget submission includes full salary provisions for civil and military employees, retirees and several other categories, alongside other financial entitlements.
The Region's negotiating delegation has also stressed that salary payments should not be affected by political or financial disputes between Erbil and Baghdad.
Budget Preparation
The Finance Ministry says the draft was prepared by the Higher Committee for Budget Preparation under the supervision of Finance Minister Falih Sari.
Representatives from federal ministries, the Kurdistan Region and the provinces participated in the process, with consultations also involving financial experts from inside and outside Iraq.
Program-Based Budgeting
The 2027 draft introduces a gradual shift toward program-and-performance budgeting, initially in the electricity sector and in Diwaniyah and Saladin.
The approach links financial allocations to defined objectives and expected results and is intended to measure the impact of government spending before being expanded to other state institutions.
| Issue | Current Information |
|---|---|
| Budget year | 2027 |
| Current stage | Referred to Ministerial Council for the Economy |
| Next stages | Council of Ministers, then Parliament |
| Drafting body | Higher Committee for Budget Preparation |
| KRG participation | Representatives involved in preparation |
| KRG priority | Regular salaries and financial entitlements |
| Budget model | Gradual program-and-performance budgeting |
| Initial application | Electricity, Diwaniyah and Salah al-Din |
| Non-oil revenue | Identified as a government priority |
| Final budget size | Not officially disclosed in latest ministry statement |
| Oil-price assumption | Not officially disclosed in latest ministry statement |
Iraq's Ministry of Finance has completed preparations for the country's 2027 federal budget and referred the draft to the Ministerial Council for the Economy, marking another step before the legislation reaches the Council of Ministers and Parliament.
The ministry said the draft was completed within the established timetable following meetings of the Higher Committee for Budget Preparation. The committee included representatives of federal ministries, the Kurdistan Region and Iraq's provinces, alongside financial experts.
The Kurdistan Region has been directly involved in the preparation process. A high-level KRG delegation held meetings in Baghdad with the federal ministries of Finance, Planning and Oil earlier this month to present the Region's positions and requests for the 2027 budget.
Among the Region's principal demands is the inclusion of provisions covering public-sector salaries and other financial entitlements. The KRG Ministry of Finance said its own submission included full salary provisions for civil and military employees, retirees and other categories, as well as funding for healthcare, investment projects and other obligations.
The KRG negotiating delegation has separately called for regular and timely salary payments, arguing that salaries should not be affected by political or financial disputes between Erbil and Baghdad.
The federal draft also marks a shift in the way Iraq plans and evaluates public spending. According to the Finance Ministry, program-and-performance budgeting will initially be applied to the electricity sector and the provinces of Diwaniyah and Salah al-Din, with the system intended to eventually expand across state institutions.
The ministry said the draft also takes into account government-program priorities, economic and financial developments, spending needs and efforts to increase non-oil revenues while strengthening fiscal discipline.
Budget Figures Still Await Official Disclosure
Some figures circulating in Iraqi political and media circles place the proposed 2027 budget at around IQD 240 trillion, with an oil-price assumption of approximately $80 per barrel and possible changes to the official dollar-sale rate.
The final spending ceiling, oil-price assumption, projected revenues and deficit should therefore be treated as subject to the remaining government and parliamentary approval process until the budget document is officially released.
FYI
The 2027 budget is particularly significant because Iraq has operated without a newly approved annual federal budget for 2026, relying instead on temporary spending mechanisms for essential expenditures. The 2027 process therefore represents an attempt to return to a formal annual spending framework while also changing how public funds are allocated and evaluated.
For the Kurdistan Region, the budget process remains closely tied to the longstanding Erbil-Baghdad disputes over salaries, oil revenues, financial entitlements and the Region's share of federal spending. The KRG has participated directly in drafting discussions and has submitted detailed requests covering salaries, investment spending and other constitutional entitlements.
The most important point at this stage is that inclusion in the draft does not necessarily mean all disputed issues have been finally resolved. The bill still has to pass through the Council of Ministers and Parliament, where its spending allocations and provisions can be debated or amended.
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