Iraq Records 6.67 Trillion Dinar Budget Deficit in First Four Months of 2026

Peregraf — Iraq recorded a budget deficit of approximately 6.67 trillion Iraqi dinars during the first four months of 2026, underscoring the country's continued dependence on oil revenues and the mounting pressure on public finances despite strong energy income.

According to data released by the Iraqi Ministry of Finance, total federal spending from January through April reached 37.84 trillion Iraqi dinars, while total revenues amounted to 31.16 trillion dinars.

The gap between spending and revenue resulted in an actual deficit of 6.67 trillion dinars during the period.

The figures show that Iraq remains heavily reliant on oil exports to finance government operations. Oil revenues generated 26.12 trillion dinars, accounting for approximately 84 percent of total federal revenue, while non-oil revenues contributed about 5.04 trillion dinars, or 16 percent.

The data highlights the persistent challenge facing successive Iraqi governments: diversifying the economy and reducing dependence on the oil sector, which remains vulnerable to fluctuations in global energy prices and regional instability.

Finance Ministry Tops Government Spending

Among federal institutions, the Ministry of Finance recorded the highest level of spending during the first four months of the year, with expenditures totaling 9.23 trillion dinars.

The ministry's spending was driven largely by pension payments, public debt obligations, and financial transfers across the government.

The Ministry of Interior ranked second with expenditures of 4.45 trillion dinars, reflecting Iraq's significant spending on security and law enforcement.

The Kurdistan Region ranked third, receiving 4.17 trillion dinars in federal expenditures during the reporting period.

The Ministry of Education followed with spending of 3.69 trillion dinars, while the Ministry of Defense recorded expenditures of 2.76 trillion dinars.

Top Five Spending Entities

At the opposite end of the spectrum, the Federal Revenue Allocation Monitoring Commission recorded the lowest expenditure among government entities, spending just 461.8 million dinars during the period.

Continued Dependence on Oil

The report illustrates the extent to which Iraq's public finances remain tied to hydrocarbon exports.

Despite years of government pledges to diversify the economy, oil revenues continue to account for the overwhelming majority of state income. Non-oil revenues, including taxes, customs duties, and fees, remain relatively limited compared with the scale of federal spending.

Economists have long warned that Iraq's fiscal sustainability depends on expanding non-oil revenue sources, improving tax collection, encouraging private-sector growth, and reducing the state's dependence on volatile energy markets.

The latest figures come as Iraq faces additional financial pressures linked to regional instability, disruptions in oil exports from the Kurdistan Region, and growing demands on public spending.

Key Figures (January-April 2026)

The data suggests that while oil continues to provide substantial income for Iraq, government expenditures are growing at a faster pace than revenues, leaving Baghdad with a significant budget shortfall early in the year.