Iraq's budget surpasses $94B; expert warns against “over-reliance” on oil
Shafaq News/ On Sunday, Iraq's Ministry of Finance reported that federal budget revenues for ten months surpassed 124 trillion dinars (approximately $94M), while an economic expert cautioned that over-reliance on oil could make the country "vulnerable" to economic fluctuations.
According to data released by the ministry in December, covering January to October of the current fiscal year, oil revenues slightly decreased to 88%, yet remain the primary source of the federal budget, reflecting Iraq's ongoing reliance on a rentier economy.
The data revealed that total revenues for the first ten months of 2024 amounted to approximately 124.659 trillion dinars, while total loans reached about 18.074 trillion dinars.
Oil revenues amounted to around 110.220 trillion dinars, making up 88% of the total budget, while non-oil revenues reached about 14.438 trillion dinars, accounting for 12% of the total.
Economic expert Mohammed Al-Hassani told Shafaq News that “over-reliance on oil exposes the country to macroeconomic fluctuations and limits its ability to implement policies against expected economic volatility.”
"Iraq must boost growth in the non-oil sector to offset the impact of oil price drops," he added, stressing that "reducing reliance on oil requires significant fiscal adjustments, including increasing non-oil revenues, cutting current expenditures, and revising the customs tariff structure."
In March 2021, Prime Minister’s Financial Advisor Mudher Muhammad Saleh told Shafaq News that Iraq’s rentier economy stems from past wars, economic sanctions, and ongoing political conflicts that have diverted resources.
According to experts, Iraq's reliance 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 borrow domestically and internationally to cover budget deficits, reflecting “poor management” of state funds and a “failure” to secure alternative financing solutions.
