Iraq’s Parliament has approved a budget of IQD198.9 trillion ($229 billion) for 2023 that sets out record spending on a growing Public Service wage bill and development projects to improve services and rebuild infrastructure ruined by neglect and war.
The Budget is the largest in the country’s history, covering three years up to 2025.
Deputy Speaker of the Iraqi Council of Representatives, Shakhwan Abdullah Ahmed said basic services must be secured, infrastructure rehabilitated, employment and work opportunities provided, affected areas reconstructed, and the suffering of displaced people ended.
The Budget aims to create tens of thousands of public sector jobs as the country, which has been racked by decades of war and sectarian strife, seeks to improve services and rebuild war-damaged facilities.
Most of the economy is State-led, and unemployment is high. The fast-growing population sees the Government’s role as a provider of jobs and there have been frequent protests over why this has not been taking place.
However, many observers have raised concerns about Iraq’s burgeoning fiscal deficit, which is estimated at a record IQD64.36 trillion ($73.4 billion), more than double compared with the 2021 Budget, according to lawmakers.
Visiting Fellow at the London School of Economics Middle East Centre, Ahmed Tabaqchali said it was likely the public sector would expand by about 600,000, which he said would raise the total cost of public wages and pensions to more than IQD76 trillion dinars ($86.8 billion).
“The more you increase this kind of spending, the more you increase your vulnerability. The oil price has to go higher and higher just to sustain spending which is crippling and will lead to more and more borrowing,” Mr Tabaqchali said.
Baghdad, 15 June 2023
