Warnings about the cost of delaying the 2026 budget
Warnings are increasing about the economic repercussions of the delay in approving the (2026) budget, amid fears of continued losses and worsening uncertainty in the markets.
In response to these warnings, the Finance Committee in the House of Representatives believes that the state has limited options to address the crisis, most notably resorting to borrowing laws or enacting an emergency law similar to the Food Security Law, but activating these options remains contingent on an official request from the government.
The Prime Minister’s financial advisor, Mazhar Muhammad Salih, confirmed that the Iraqi economy, which relies heavily on government spending as a major driver of growth, is directly affected by any delay in approving the budget, explaining that this turns into a recession factor that affects both the public and private sectors and creates a prolonged state of instability.
He pointed out that the most prominent repercussions are the disruption of investment projects, especially new ones, as a result of the lack of financial allocations, which negatively affects the labor market through a decline in employment opportunities and an increase in unemployment rates. link