ERBIL () — Iraq’s 2027 federal budget law has reached its final drafting stage, with the total budget estimated at nearly 200 trillion dinars ($153 billion) and a projected deficit of between 65 and 70 trillion dinars, while two key disputes between Baghdad and the Kurdistan Region remain unresolved.
correspondent Dilan Barzan reported from Baghdad on Saturday that the committee responsible for preparing the draft budget law at the Iraqi Ministry of Finance has intensified its meetings following the return of Iraq’s finance minister and prime minister from New York.
The committee is working to complete the draft in time for it to be approved by the Council of Ministers and referred to parliament by Oct. 15, according to the report.
The draft budget is expected to set an oil price of between $55 and $60 per barrel, amid uncertainty surrounding oil exports and heightened tensions in the Strait of Hormuz.
Despite recent positive meetings between the Kurdistan Regional Government (KRG) and the federal government, two major issues remain at the center of negotiations: the Kurdistan Region’s share of the federal budget and a provision requiring the Region’s financial entitlements to be calculated according to actual spending.
Dispute Over Kurdistan Region’s Budget Share
The Iraqi Ministry of Finance has set the Kurdistan Region’s share at 12.67 percent in the current draft, while the KRG is seeking to raise it to 14.67 percent based on the latest national census data.
The size of the Region’s share has long been a contentious issue between Erbil and Baghdad, with the KRG arguing that the percentage should reflect updated population figures.
The second major dispute concerns a provision in the draft requiring the Region’s financial entitlements to be linked to actual expenditure.
The Kurdistan Region’s negotiating team is seeking the complete removal of the provision, arguing that a similar mechanism has contributed to disputes over salaries and the Region’s financial entitlements in previous years.
KRG Seeks Inclusion of Contract Workers
Another issue under discussion concerns the employment of contract workers, daily wage employees, and graduates of oil institutes.
The Kurdistan Region is asking Baghdad to ensure that these employment opportunities are also allocated to graduates and employees in the Region according to its budgetary share and that the positions are incorporated into the federal budget.
The issue is expected to be among the points addressed during the next round of negotiations between the two sides.
KRG Delegation to Visit Baghdad
A senior delegation accompanied by officials from the KRG Ministry of Finance are expected to visit Baghdad in the coming days to seek agreement on the outstanding issues and finalize the relevant provisions.
The talks are expected to focus on reaching an agreed text before the draft budget is submitted to the Council of Ministers for approval.
The negotiations come as Baghdad works to meet its timetable for submitting the 2027 budget to parliament, with the final outcome of the discussions likely to determine how the Kurdistan Region’s financial entitlements are addressed in the draft law.
