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Budget Amendment: How It Will Boost Iraq’s Economy & Kurdistan

Kurdistan Oil Revenues Projected to Benefit Iraqi Budget Amid Economic Challenges

An analysis by oil affairs expert Kovand Sherwani highlights that the recent budget amendment is poised to have positive implications not just for the Kurdistan region, but for the broader Iraqi economy as well. As of February 4, 2025, Sherwani emphasized that the changes to the budget are crucial given the current economic climate, which is characterized by significant deterioration and a liquidity crisis affecting budgetary allocations for essential services and strategic projects.

Sherwani noted that Iraq is facing a budget deficit estimated at 49 billion dinars. The introduction of Kurdistan’s oil revenues is expected to mitigate this deficit and diminish the need for borrowing, thereby ensuring that the government can fulfill its commitments to employees and the populace. This amendment is anticipated to inject billions of dollars into the economy while simultaneously enhancing the oil market through the pumping of approximately 420,000 barrels of oil per day.

The Iraqi House of Representatives has taken decisive action by voting in favor of the draft law for the first amendment of the Federal Public Budget Law. According to statements released by the Council, this amendment pertains to the public budget for the financial years 2023, 2024, and 2025 and is identified as Law No. 13 of 2023.

The implications of these developments are significant as they address some pressing economic vulnerabilities and aim to stabilize both the federal budget and the overall economic framework of Iraq.

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