Iraq’s first draft budget for 2019 shows an overall increase in spending of 23% compared to 2018. Oil revenues still dominate sources of revenue, projected at 89% of government finances.
The Iraqi government, with help from international creditors, has been aiming to increase non-oil sources of income. In 2019 however, non-oil income reduces by IQD 2.65 tr ($ 2.24 bn), or a decline of 18%.
Spending on energy, security, and defense as well as social services remains a priority ahead of other sectors. Notably, the state’s planned spending on capital projects will grow by 32% and liberated provinces are included again in planned financial allocations after years of war, an important progression from 2018.
However, Iraq’s greatest challenge of reducing its operational expenditure is still unresolved as it expands by 21% in 2019 and dominates 75% of total expenditure. This will, of course, leave the country extremely vulnerable to another fall in oil prices.
Iraq Business News