A document from Iraq’s Ministry of Finance, signed by Finance Minister Taif Sami and addressed to the Prime Minister’s Office on February 9, 2025, highlights a significant deficit in the general treasury. The document explicitly states that the treasury is unable to sustain salary payments for employees, retirees, and social welfare beneficiaries. It further warns that if additional financial burdens are introduced, the treasury’s ability to fulfill its obligations will be entirely compromised.

This warning comes at a particularly crucial time, as Iraq is in an election year, with national elections only months away. Historically, incumbent prime ministers have resorted to increased public spending as a strategy to secure voter support. However, given the severe financial strain on the treasury, it remains uncertain whether the current Prime Minister will take the risk of further depleting state finances for political gain.

Despite these concerns, the Accounting Department of the Ministry of Finance issued a statement on February 18, 2024, asserting that funding for state employee salaries for February is proceeding as per approved financial procedures and budget allocations. The Ministry reiterated its commitment to salary disbursement for employees, retirees, and the social protection network without delays. Furthermore, it denied any financial shortfall that would impact salary expenditures, emphasizing its ongoing efforts to maintain fiscal stability and ensure the consistent implementation of salary disbursement schedules. asserting that funding for state employee salaries for February is proceeding as per approved financial procedures and budget allocations. The Ministry reiterated its commitment to salary disbursement for employees, retirees, and the social protection network without delays. Furthermore, it denied any financial shortfall that would impact salary expenditures, emphasizing its ongoing efforts to maintain fiscal stability and ensure the consistent implementation of salary disbursement schedules.

Currency Reserves Under Pressure

Iraqi parliamentarian Manar Al-Obeidi, in a Facebook post, revealed a troubling decline in Iraq’s official currency reserves. “Iraq lost 4% of its reserves in a single month,” she noted, adding that “in 2024, the country depleted 10% of its total reserves.” She further detailed that by the end of 2024, reserves had fallen to 130 trillion Iraqi dinars, down from 147 trillion in November 2023—the lowest level in over two years, last seen at the end of 2022. In December 2024 alone, reserves dropped by 6 trillion dinars (4%), contributing to a cumulative loss of 15 trillion dinars (10%) throughout the year. Al-Obeidi attributed this decline to escalating government spending outpacing revenue, necessitating the use of reserves to bridge financial gaps and fund rising operational and investment costs. She also pointed to broader economic challenges, urging a review of financial policies to safeguard reserve stability.

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Iraq’s Revenue and Expenditure Overview (January–November 2024)

Total Revenue

According to the Ministry of Finance’s report published on February 9, 2025, Iraq’s total revenue from January to November 2024 amounted to 135.3 trillion Iraqi dinars. The revenue sources are classified as follows:

• Oil Revenue: 119.03 trillion dinars (88% of total revenue).
• Non-Oil Revenue: 16.29 trillion dinars (12% of total revenue).

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Total Expenditure
Expenditures totaled 136 trillion, 431 billion, 100 million, and 288 thousand dinars, encompassing both operational and investment spending:

• Operational Expenses: 113 trillion, 564 billion, 500 million, and 888 thousand dinars (87%).
• Investment Expenses: 22 trillion, 866 billion, 599 million, and 399 thousand dinars (13%).

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Investment Spending Breakdown

Investment expenditure of 22 trillion, 866 billion, 599 million, and 399 thousand dinars (13% of total spending) was distributed across key sectors:

• Agriculture: 178 billion, 448 million, and 516 thousand dinars (1%).
• Industry: 12 trillion, 820 billion, 656 million, and 704 thousand dinars (56%).
• Transportation and Communications: 2 trillion, 668 billion, 634 million, and 311 thousand dinars (12%).
• Construction, Services, and Roads: 6 trillion, 96 billion, 689 million, and 396 thousand dinars (27%).
• Education: 1 trillion, 102 billion, 170 million, and 471 thousand dinars (5%).

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Deficit Calculation

Comparing revenue to expenditure, the Ministry recorded a deficit of 1 trillion, 108 billion, 383 million, and 593 thousand dinars, representing approximately 1.6% of total revenue, as expenses exceeded income.

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Expenditure of the Three Presidencies (January–November 2024)

Total expenditures for Iraq’s three presidencies (Parliament, Presidency of the Republic, and Council of Ministers) amounted to 9.95 trillion dinars. The breakdown is as follows:

• Parliament: 544.5 billion dinars (of which only 126,000 dinars were allocated to investment expenditures).
• Presidency of the Republic: 55.5 billion dinars (entirely allocated to operational expenditures).
• Council of Ministers: 9.35 trillion dinars, comprising:
  • 7.51 trillion dinars (80%) for operational expenditures.
  • 1.84 trillion dinars (20%) for investment expenditures.

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Iraq’s fiscal landscape in 2024 reveals a treasury under strain, heavily reliant on oil revenue (88% of total income) yet unable to keep pace with escalating expenditures. The reported 1.6% deficit, dwindling reserves, and conflicting narratives—between immediate salary assurances and dire warnings of insolvency—point to a complex financial crisis. As MP Al-Obeidi and the Ministry’s data suggest, stabilizing Iraq’s economy will demand rigorous policy adjustments to boost non-oil revenue, curb spending, and protect reserves for future resilience.