Government Confirms 2027 Budget Ready by October Deadline

Mazhar Mohammed Saleh, the Financial Advisor to the Prime Minister, revealed that the government will commence preparing the draft federal budget law for 2027 this July, in accordance with the provisions of the Financial Management Law. He explained that the upcoming budget will feature a new economic vision focused on stimulating investment, empowering the private sector, and establishing sovereign funds to support infrastructure projects, concurrently addressing internal debt and curbing financial waste. Saleh emphasized that combating corruption and recovering associated funds are fundamental pillars for enhancing national economic efficiency, lowering investment costs, and supporting the path of sustainable development. In a press statement, he clarified that the amended Financial Management Law of 2019 obliges the Ministry of Finance to begin preparing the draft in July. The draft is expected to be completed in September, then presented to the Council of Ministers for approval before its referral to the Council of Representatives in October for discussion and legislation. Saleh indicated that the 2026 budget was affected by economic conditions and challenges accompanying developments in the Strait of Hormuz. He noted that the deficit is measured by the size of internal debt, which has exceeded 100 trillion dinars. He affirmed, however, that the government has a clear financial policy to address this issue through reform measures that contribute to strengthening resource-based economy and diversifying revenue sources. The financial advisor stated that the country continues to face the effects of accumulated financial waste since 2003, stressing that the state is moving towards tightening control over public funds and preventing the wastage of any resource, which enhances stability and preserves national wealth. Saleh further explained that the 2027 budget will be distinctive due to its alignment with the government's economic vision. It will provide greater scope for private sector participation and include the establishment of sovereign funds to finance infrastructure projects, thereby supporting sustainable development and boosting economic growth in the next phase. Regarding anti-corruption efforts and the recovery of funds, Saleh reiterated that they form the basis for enhancing economic efficiency, reducing investment costs, and supporting sustainable development, noting that eliminating corruption will positively impact the state's financial and economic performance. The financial advisor mentioned the difficulty in precisely determining the true volume of funds linked to corruption. However, estimates from international governance circles in the business environment point to what is known as the "Iraq Cost" on projects and investments, which could reach about 45% of the implementation cost. He attributed this to multiple factors, most notably extortion, bribery, and the resulting decrease in the efficiency of administrative procedures. He clarified that the successful implementation of the government's anti-corruption program will gradually reduce this unproductive cost, bringing investment costs closer to their fair levels based on efficiency and integrity. This, in turn, enhances the attractiveness of local and foreign investment and lowers the cost of executing economic and social development projects. He added that activating the role of oversight and auditing bodies, particularly during the planning, execution, and investment spending stages, constitutes a fundamental pillar for curbing financial waste and establishing standards of transparency and good governance. This supports the path of sustainable development in the country with minimal costs and maximum returns and benefits for the national economy. Saleh pointed to estimates by some circles that the volume of corruption-related funds amounts to approximately 300 billion dollars, distributed among real estate, financial, and cash assets both inside and outside the country. He emphasized that the recovery of these funds is an important factor in alleviating current financial burdens. He concluded that tackling corruption is not limited to mere fund recovery; it also contributes to improving overall economic performance by reducing costs and increasing the efficiency of economic activities within an environment free from corruption factors. This will positively reflect on reducing the deficit and public debt, directly and indirectly, by enhancing the efficiency of financial and economic performance of public budgets and the country's resources in the future.