Iraq runs 26 trillion dinar deficit through July, oil funds 78%

Summary

• Iraq collected 39.096 trillion dinars by end-July 2026, with oil supplying 78% of the total.
• Spending reached 65.424 trillion dinars, leaving a deficit of 26.329 trillion dinars.
• Salaries and social welfare absorbed roughly 51 trillion dinars, economist Nabil al-Marsoumi said.

The latest

Iraq's federal budget ran a deficit of 26.329 trillion dinars in the first seven months of 2026, with actual spending of 65.424 trillion dinars outpacing revenue of 39.096 trillion, according to Finance Ministry budget-execution data cited by Shafaq News. Oil sales accounted for 78% of all income collected through the end of July.

Details

• The headline figures: Finance Ministry data showed total revenue of 39.096 trillion dinars through end-July 2026 against actual expenditure of 65.424 trillion dinars. The gap between the two lines produced a deficit of 26.329 trillion dinars over the seven-month period, according to Shafaq News.
• The oil share: Oil revenue reached roughly 30.356 trillion dinars, or 78% of everything the state collected, according to the ministry figures. That leaves non-oil sources — taxes, customs, fees and state-company returns — supplying under a quarter of the budget's income through July.
• Where the money went: Economist Nabil al-Marsoumi said on X that around 51 trillion dinars of total spending went to salaries and social welfare payments. On the ministry's own expenditure figure, that single category absorbs the large majority of what the federal government disbursed in the period.
• The economist's reading: Al-Marsoumi argued that the data point to a deepening dependence on oil in the Iraqi budget alongside a swelling operational chapter — the recurring spending line covering wages, pensions and running costs, as opposed to investment allocations.
• The structural squeeze: With oil at 78% of revenue and salaries and welfare at roughly 51 trillion dinars, the two sides of the ledger are locked together: a payroll fixed in dinars is being financed by an income stream priced in a commodity Baghdad does not control.
• Scale of the gap: The 26.329 trillion dinar shortfall is equivalent to about two-thirds of all revenue booked in the same seven months, meaning for every two dinars collected Iraq spent roughly three through the end of July.
• The timeframe: The figures cover execution of the federal budget only to the end of July 2026 and are therefore partial-year numbers. The ministry did not publish a projection for the full-year deficit or state how the seven-month gap was financed.
• The investment question: Al-Marsoumi's reference to an inflated operational chapter points to the recurring trade-off in Iraqi budgets, where the share left for investment and capital projects narrows as wages, pensions and welfare claim more of each year's outlays.

Background

Iraq has run an oil-dominated budget for years, with crude sales historically supplying the overwhelming majority of federal revenue. Successive governments have pledged to widen non-oil income through taxes and customs, and the latest Finance Ministry figures show oil still at 78% of collections.

Between the lines

The seven-month numbers describe a budget with limited room to maneuver. Nearly all the revenue is oil, and the largest expenditure line is salaries and welfare, which governments rarely cut. That combination, as al-Marsoumi framed it, means any sustained weakness in crude prices passes almost directly into the deficit rather than being absorbed elsewhere in the ledger.

What's next

Watch the Finance Ministry's next budget-execution release for August and later months to see whether the deficit widens, and any announcement on how Baghdad is covering the shortfall.

Source: Shafaq News, Iraqi Finance Ministry