ERBIL, Kurdistan Region - Iraq’s Ministerial Council for the Economy on Sunday recommended referring the draft federal budget law for 2027 to the Council of Ministers, marking a key step toward parliamentary consideration of next year’s spending plan. The council reviewed the draft during its 12th session on Sunday, according to an official document signed by Finance Minister Falih al-Sari, who also serves as deputy chairman of the Ministerial Council for the Economy. The document, marked “Very Urgent,” recommended that the draft be submitted to the Council of Ministers while taking into account observations made by council members. The move followed the Finance Ministry’s completion of the draft after a series of meetings by the Supreme Budget Committee, chaired by Sari and attended by representatives of federal ministries, the Kurdistan Region and Iraq’s provinces, as well as financial experts. “We completed the draft budget within the scheduled timeframe,” Sari said in a statement released by the ministry on Sunday, adding that the draft also reflects the government’s priorities and recent economic developments. “The draft budget takes into account the development of the government program and economic changes, placing significant importance on the needs of various segments of society,” he said. The 2027 budget is being prepared against a backdrop of prolonged fiscal uncertainty. Iraq did not enact a new budget law for 2026 and has instead operated under a one-twelfth spending mechanism based on previous budget allocations. Sari said the 2027 budget “emphasizes increasing non-oil revenues and enforcing fiscal discipline.” The draft also comes as Baghdad and the Kurdistan Regional Government resume negotiations over Erbil’s share of the federal budget. Earlier this month, a senior KRG Finance Ministry source told Rudaw English that Erbil was seeking 14.1 percent of the national budget, calculated on the basis of the 2025 population census. “We are heading to a month of extensive discussions with Baghdad,” the source said, adding that the talks would address the Kurdistan Region’s financial needs and responsibilities. The dispute over the Kurdistan Region’s federal allocation has persisted for more than a decade, with disagreements over oil exports and revenue-sharing contributing to recurring tensions between Erbil and Baghdad. The latest draft is expected to proceed to the Council of Ministers before being submitted to parliament. Under Iraq’s established budget process, the Council of Ministers submits the draft budget law to parliament for approval. The Finance Ministry has not yet publicly disclosed the draft’s overall expenditure, revenue, deficit or oil-price assumptions.
