Iraq's budget surpasses $94B; expert warns against “over-reliance” on oil
Shafaq News/ On Sunday, Iraq'sMinistry of Finance reported that federal budget revenues for ten monthssurpassed 124 trillion dinars (approximately $94,240,000), while an economicexpert cautioned that over-reliance on oil could make the country "vulnerable" to economic fluctuations.
According to data released by the ministryin December, covering January to October of the current fiscal year, oilrevenues slightly decreased to 88%, yet remain the primary source of thefederal budget, reflecting Iraq's ongoing reliance on a rentier economy.
The data revealed that totalrevenues for the first ten months of 2024 amounted to approximately 124.659 trilliondinars, while total loans reached about 18.074 trillion dinars.
Oil revenues amounted to around 110.220trillion dinars, making up 88% of the total budget, while non-oil revenuesreached about 14.438 trillion dinars, accounting for 12% of the total.
Economic expert Mohammed Al-Hassanitold Shafaq News that “over-reliance on oil exposes the country tomacroeconomic fluctuations and limits its ability to implement policies againstexpected economic volatility.”
"Iraq must boost growth in thenon-oil sector to offset the impact of oil price drops," he added, stressingthat "reducing reliance on oil requires significant fiscal adjustments,including increasing non-oil revenues, cutting current expenditures, andrevising the customs tariff structure."
In March 2021, Prime Minister’sFinancial Advisor Mudher Muhammad Saleh told Shafaq News that Iraq’s rentiereconomy stems from past wars, economic sanctions, and ongoing politicalconflicts that have diverted resources.
According to experts, Iraq'sreliance on oil as the sole source of its budget makes the country “vulnerable”to global crises that can impact oil prices. This often forces Iraq to borrowdomestically and internationally to cover budget deficits, reflecting “poormanagement” of state funds and a “failure” to secure alternative financingsolutions.
