Iraq's 2027 draft budget assumes $58 oil, $166 billion spending

Summary

• Iraq's government proposed a $58-per-barrel oil price assumption for the 2027 budget, lawmakers said.
• Total spending is projected at 217 trillion dinars, about $166 billion, with a deficit exceeding 40 trillion dinars.
• The oil assumption sets the baseline for revenue, borrowing needs and salary spending in an oil-dependent economy.

The latest

Iraq's draft 2027 budget is built on an oil price assumption of $58 a barrel, lawmakers familiar with the document told Reuters on Tuesday. The draft projects total spending of 217 trillion Iraqi dinars, equivalent to roughly $166 billion, and a deficit of more than 40 trillion dinars. The lawmakers did not specify when the draft would reach parliament.

Details

• The price assumption: The government has proposed pricing crude at $58 a barrel for 2027 planning purposes, according to lawmakers familiar with the draft. That figure is the central variable in the budget, because it determines how much revenue the state can book against the spending it has already committed to.
• The spending line: Total expenditure in the draft is set at 217 trillion Iraqi dinars, lawmakers said, which converts to about $166 billion at the exchange rate of 1,309.5 dinars to the dollar used in the calculation. The breakdown of that spending between operating costs and investment was not detailed.
• The deficit: The draft carries a projected shortfall of more than 40 trillion dinars, according to the lawmakers. That is close to one-fifth of planned spending, leaving the government to cover the gap through borrowing, reserves or carried-over balances. The draft's financing plan for the deficit was not specified.
• The sourcing: The figures were described to Reuters by lawmakers familiar with the draft budget rather than announced publicly by the finance ministry. No government statement accompanied the disclosure, and the officials were not named in the account of the draft's contents.
• The exchange rate: The dollar conversion in the draft rests on a rate of 1,309.5 dinars to the dollar. Any change to the official rate would alter the dollar value of both the spending ceiling and the deficit without a single dinar of the budget being rewritten.
• What is still open: The draft remains a government proposal at this stage. Lawmakers did not give a date for its referral to parliament, nor did they describe the schedule for debate, amendment or a vote on the figures contained in it.
• The revenue logic: Oil sales supply the overwhelming share of Iraqi state income, so the per-barrel assumption functions as the floor for the entire revenue side. Export volumes assumed alongside the $58 figure were not disclosed by the lawmakers describing the draft.

Background

Iraq builds its annual budgets around a fixed oil price assumption set by the government. When market prices run above the assumption, the treasury collects a surplus against plan; when they fall below it, the projected deficit widens and the state leans harder on borrowing.

Between the lines

The $58 assumption and the 40-trillion-dinar deficit are linked: the shortfall is calculated against that price, so a weaker market in 2027 would push the gap wider than the draft projects. With spending set at 217 trillion dinars and no financing plan disclosed, the burden of any price miss falls on borrowing rather than on the expenditure ceiling.

What's next

Watch for the draft's formal referral to parliament, the finance ministry's own publication of the figures, and whether lawmakers move to revise the $58 assumption or the spending ceiling during debate.

Source: Reuters