Iraq plans to allocate about $15 billion in its 2027 draft budget to complete delayed development projects. The Iraq infrastructure funding plan will focus on unfinished projects rather than launching new ones. Officials say the approach aims to reduce costs and improve the use of public funds.
The proposed allocation stands at 20 trillion Iraqi dinars, or roughly $15 billion. The government intends to direct the entire capital spending program toward existing infrastructure projects. No funding will go toward new development projects under the proposed approach.
The plan targets essential services across Iraq, including hospitals, schools, bridges, tunnels, and water networks. Completing these projects could improve public services while reducing the financial burden of unfinished construction. It could also help the government address long-standing infrastructure needs.
Financial adviser Mazhar Saleh said the draft budget will not include funding for new development projects. Instead, the government wants to concentrate resources on projects already under construction. This strategy reflects growing pressure to control spending and meet existing financial commitments.
The government also plans to use a cautious oil price assumption for the 2027 budget. The proposed benchmark ranges between $60 and $70 per barrel. This conservative estimate could help Baghdad prepare its spending plans against possible changes in global oil markets.
The Iraq infrastructure funding plan comes after Iraq did not prepare a formal 2026 budget. Regional instability disrupted the normal budget process and created additional economic challenges. Parliament’s financial committee expects the government to submit the 2027 draft between late October and early November.
Iraq faces significant financial pressure as it reorganizes public spending. The Ministry of Finance is working with the World Bank to introduce a program-and-performance budgeting system. The new approach would move away from traditional spending based mainly on individual budget lines.
The country’s financial situation has become more difficult because of high government payroll costs. The budget deficit exceeded 21 trillion Iraqi dinars during the first half of the year. The deficit equals roughly $16.1 billion and has increased pressure on development spending.
As a result, more than 1,800 development projects have faced cancellation or suspension. Many of those projects require additional funding before authorities can complete them. The government now wants to prioritize projects that can deliver practical results with available resources.
Oil exports also remain central to Iraq’s financial position. Crude sales provide more than 85% of government revenue, making the economy highly dependent on energy exports. Regional military operations and restrictions around the Strait of Hormuz have reduced maritime crude shipments.
Baghdad is therefore seeking additional ways to protect its oil revenues. Authorities have introduced temporary three-month marketing arrangements to diversify export routes. They are also focusing on pipelines through Turkey and Syria to increase export capacity.
The Iraq infrastructure funding plan represents a shift toward completing existing obligations before starting new projects. If approved, the strategy could concentrate limited public resources on unfinished infrastructure. However, its success will depend on available revenues, project management, and Iraq’s ability to stabilize its broader finances.