Economy Update – Baghdad
The Iraqi government convened its fourth cabinet session of 2025 today, led by Prime Minister Mohammed Shia Sudani. This session aimed to address the general state of the country, prioritize government initiatives, and make necessary decisions regarding pressing agenda items.
The Prime Minister’s media office confirmed that discussions focused on vital priorities within the government’s program and the overarching economic situation. A significant outcome was the approval of the Majnoun oil field’s inclusion in social benefits projects, aligning it with other licensing contracts. The Ministry of Oil and Basra Oil Company have been empowered to execute service projects as per Cabinet Resolution 24318 from 2024, which outlines the framework for licensing round contracts. Furthermore, the Ministry of Finance has allocated an annual budget of $10 million from the Majnoun oil field account to fund these projects.
In line with enhancing airport operations, the cabinet approved the following key measures:
- Development of airports in Basra, Mosul, Dhi Qar, and Al-Najaf Al-Ashraf in partnership with the private sector (Public-Private Partnerships), adhering to a specific schedule in collaboration with the Civil Aviation Authority. The cost of the advisory study will be borne by the winning tender as well as part of the relevant province’s budget.
- The Ministry of Transport or the governorate where the airport is located will be responsible for selecting the partner from the winning bidder, ensuring collaboration between the ministry and local authorities.
- Federal oversight will be maintained exclusively over all aspects related to Passports, Health, Security, Airport Security, and Air Traffic Control.
- Baghdad International Airport will remain under the Ministry of Transport’s direct contract with the investor, exempt from the above partnerships.
Additionally, the cabinet made pivotal decisions to:
- Ensure that the Ministry of Transport/Iraqi Airways promptly pays its dues post-signing of investment contracts or partnerships as per the wage system established for civil airports (Law No. 6 of 2018).
- Engage with investors to establish the minimum revenue guarantee from Iraqi stakeholders and facilitate the necessary documentation for the Ministry of Finance to secure these guarantees.
- Initiate amendments to the wage system per airports (Law No. 6 of 2018) to ensure wage structures align with contractual obligations and the dynamics of the air transport market.
The council sanctioned a draft law linking the operations of the Insurance Bureau under the Central Bank to ongoing financial reform processes. Furthermore, as part of international tax cooperation efforts, the council authorized the Director General of the General Authority for Taxes to negotiate a draft agreement aimed at avoiding double taxation with the Sultanate of Oman. The Ministry of Foreign Affairs will prepare the necessary documentation to facilitate this agreement.
In an effort to promote trade efficiency, the cabinet approved regulations for the e-commerce framework in Iraq. Additionally, the first amendment draft to the Sunni Endowment Court Law (Law No. 56 of 2012) was approved for submission to the House of Representatives, integrating recommendations from legal evaluations.
In pursuit of enhancing Baghdad’s cultural heritage, the cabinet agreed to set aside the Al-Qishaa Heritage Building rehabilitation project from the implementation directives governing government contracts (No. 2 of 2014) and to engage a nominated contractor endorsed by the Ministry of Culture and Tourism.
To support the revitalization of stalled initiatives, the cabinet approved the following actions:
- Creation of a component focusing on medical devices and supplies as part of the Mosul Hospital rehabilitation project under the Ministry of Health’s 2023 investment budget.
- Increasing project costs for the residential complex in Diyala/Al-Ghurai Governorate, encompassing additional supervision and oversight.
- Augmenting reserves related to the residential complex project in Wasit/Zerbatiya Governorate.
- Increasing components related to classroom construction within the engineering complex project at the University of Babylon, alongside surveillance enhancements and financial provisions for pending dues.
The cabinet concluded by approving a provision of 294.370 billion dinars for the support of the 2025 parliamentary elections. This brings the overall amount for election-related expenses to 398.600 billion dinars, as an exception from the operational guidance underscoring the 2023-2025 budgetary laws, thereby ensuring that all sovereign expenditures encompass the needs of the House of Representatives.
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