At a Glance

• Channel8 has learned the Kurdistan Region’s share of Iraq’s 2027 budget is set at 6.1% of the total 217 trillion dinars.
• Council of Ministers Secretary Amanj Raheem stated a high-level KRG delegation will return to Baghdad this week to restart specific budget talks.
• The draft was returned to allocate funds for new Iraqi ministries, while Channel8 understands Article 10 regarding the KRG share remains unchanged for upcoming negotiations.
• A massive 113 trillion dinars is designated for sovereign expenditures like defense and debt repayment, heavily lowering the remaining pool.
• An official explained that Prime Minister Masrour Barzani and Deputy PM Qubad Talabani have not traveled yet because current rounds are strictly technical. 

Channel8 has learned that the Kurdistan Region’s share of Iraq’s 2027 budget has been set at 6.1% of the total 217 trillion dinars, ahead of a high-level KRG delegation visit to Baghdad this week.

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Key Statements and Focus Area

• Amanj Raheem, the Secretary of the Council of Ministers, stated that they are scheduled to visit Baghdad again this week to restart the discussions specific to the Kurdistan Region's share in the budget.
• An official in the KRG Council of Ministers confirmed to Channel8 that their delegation has had “good discussions” with the Iraqi Ministry of Finance, but detailed discussions still remain, and this week the high-level government delegation will return to Baghdad, though its timing has not been finalized.
• The Iraqi Council of Ministers has instructed the Ministry of Finance to amend the draft of the 2027 budget project.

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The return of the draft budget to the Ministry of Finance is explicitly intended to secure funding for newly established ministries within the Iraqi government. At the same time, Channel8 understands that Article 10, which dictates the Kurdistan Region's financial share, remains unchanged in the current draft. 

Consequently, the federal Ministry of Finance has been tasked with restarting negotiations with the Kurdistan Region to reach a mutual agreement on these specific clauses.

According to a KRG Council of Ministers official who spoke to Channel8 regarding the 217 trillion dinar 2027 draft budget, a massive 113 trillion dinars has been carved out exclusively for sovereign expenditures, covering the ministries of defense and foreign affairs, strategic projects, and sovereign debt repayments. 

An additional 41 trillion dinars is earmarked for electricity and program performance across two Iraqi provinces, with 37 trillion dinars dedicated solely to power infrastructure. 

Furthermore, 14 trillion dinars from the sovereign pool is set aside for projects, while 40 trillion dinars has been stripped from operational and salary allocations to bolster sovereign spending.

This specific structuring severely impacts the Kurdistan Region's net allocation. While the KRG has historically been excluded from receiving sovereign funds, Iraq’s independent external debt repayments are factored into the general budget, forcing the region to bear the financial burden. 

This extensive sovereign front-loading leaves a remaining budget pool of roughly 104 to 105 trillion dinars. From this baseline, the federal Ministry of Finance intends to set a 12.70% allocation for the Kurdistan Region, bringing the final net share to approximately 13 trillion dinars—amounting to 6.1% of Iraq's total 217 trillion dinar national budget.

Compounding these financial pressures, Article 10 retroactively registers a controversial 9 trillion dinar past debt against Erbil, despite the federal government maintaining a freeze on regional budget transfers since 2014. 

KRG officials warn that these cumulative restrictions, alongside Baghdad's continuous clawbacks of 120 billion dinars in local non-oil revenues, place immense pressure on the KRG, which must independently fund the payrolls of 60,000 contract and permanent public servants.

As the senior delegation prepares to travel, the Council of Ministers official addressed why KRG Prime Minister Masrour Barzani and Deputy Prime Minister Qubad Talabani have not yet personally traveled to Baghdad to intervene. 

The official reaffirmed that both leaders remain fully prepared to visit the capital the moment the budget draft reaches the federal cabinet level, emphasizing that their travel is deferred only because the current rounds of talks are strictly technical. 

"As a high-level government delegation, before our departure to Baghdad, we met with the Prime Minister and Deputy Prime Minister, and they are personally on the line with Baghdad officials regarding the budget issue," the official added.

FYI

Last week, the Iraqi Council of Ministers officially voted to send the draft of the 2027 budget project back to the Ministry of Finance. 

This cabinet rejection occurred because when Finance Minister Faleh al-Sari sent the budget project to the Council of Ministers, he went and forwarded the entire draft, whereas he should only forward the strategic points and proposals. 

Building on a decade of deep financial friction, the Kurdistan Regional Government is firmly demanding a 14.14% share of the federal budget, a figure backed by recent general population census raw results. 

However, Baghdad's unrefined 217 trillion dinar draft scales this back significantly, capping the Region's overall allocation at a heavily restricted 6.1%. 

Erbil argues that this reduction ignores local population numbers and historical deficits, pointing out that the KRG received an average of only 2.04% of Iraq's general budget between 2014 and 2025 after sovereign expense deductions. 

To prevent future crises, the KRG is using these critical technical rounds to demand that Kurdish public servant, retiree, and Peshmerga salaries be permanently decoupled from broader political disputes.

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