Iraq faces a growing electricity deficit as monthly spending reaches 600 billion Iraqi dinars. However, authorities recover only 1% of that amount through bill collection. This electricity sector deficit continues to strain public finances.
The ECO Iraq Observatory revealed the figures in a public statement. The group said Iraq spends nearly 600 billion dinars each month. This equals about $397 million. Meanwhile, monthly electricity fee collections do not exceed one billion dinars.
The Ministry of Electricity covers salaries, maintenance, and fuel purchases. Yet revenue fails to match these heavy costs. As a result, the electricity sector deficit expands every month.
ECO Iraq described the imbalance as a serious weakness in collection systems. The group criticized the lack of financial discipline. Therefore, the gap between spending and revenue widens Iraq’s budget deficit.
In addition, electricity generation remains below national demand. Current production stands at about 28,000 megawatts. However, national demand reaches 50,000 megawatts. During peak summer, demand climbs to 55,000 megawatts.
Consequently, supply fails to meet consumer needs. Households and businesses continue to face power shortages. The electricity sector deficit therefore affects both economic stability and daily life.
Although Iraq ranks among the world’s largest oil producers, it still struggles with chronic power shortages. The country continues to rely on energy imports to cover domestic demand. This reliance increases costs and deepens the electricity sector deficit.
ECO Iraq urged the government to adopt structural reforms. The group called for privatization or stronger private sector engagement. It argued that reform would reduce waste and improve operational efficiency.
Moreover, stronger management could stabilize electricity supply. It could also ensure fair and consistent fee collection. Officials believe that reform would directly address the electricity sector deficit.
The issue also unfolds under fiscal constraints. Iraq operates for the second consecutive year under the “1/12 financial management rule.” This rule allows monthly spending at one-twelfth of the previous year’s operational budget.
However, this mechanism limits fiscal flexibility. It restricts large-scale reforms and investment decisions. Therefore, the electricity sector deficit continues without a comprehensive solution.
Experts warn that continued imbalance will increase pressure on public finances. They argue that urgent reforms must follow. Without action, Iraq will continue to spend billions while recovering almost nothing.
Ultimately, the numbers highlight a structural crisis. Iraq spends 600 billion dinars each month. Yet it collects only 1% in return. The electricity sector deficit now demands immediate economic and policy intervention.