Iraq enters fourth budgetless fiscal year since 2003

BAGHDAD, Iraq — Iraq has entered a budgetless fiscal period for the fourth time since 2003 after parliament failed to approve the 2026 federal budget, leaving the government to operate under temporary spending rules. Prime Minister's financial advisor Mazhar Mohammed Salih said fiscal policy for 2026 will be carried out under Article 13 of the Federal Financial Management Law No. 19 of 2019, which allows monthly spending at one-twelfth of the previous year's outlays. The arrangement keeps salaries, pensions, social assistance and committed investment payments flowing, while leaving little room for new projects. Petroleum revenues account for more than 90 percent of public income, and regional developments affecting exports have added to fiscal pressure. Economist Diaa al-Muhsin warned that without a budget, new development projects are difficult to launch, and spending on roads, bridges, schools, hospitals, and electricity and water networks will slow. More than 4,000 projects are already suspended, according to local reports, and further initiatives risk being added to the backlog. Public hiring is expected to be limited to the health, education and security sectors, raising concerns about youth unemployment. Financial expert Mahmud Daghir described the absence of a 2026 budget as the country's most difficult economic period, adding that paying salaries and protecting foreign currency reserves remain the immediate priorities. No timeline for a new budget vote was given.