The Ministry of Finance and Economy of the Kurdistan Regional Government (KRG) has sharply criticized the federal government in Baghdad over what it describes as a serious financial violation. In a newly released report, the ministry reviewed federal budget transfers covering the 2023–2025 period. The findings reveal a wide gap between the Kurdistan Region’s legal budget entitlements and the funds Baghdad actually transferred.
According to the ministry, Iraq’s three-year federal budget law took effect on June 21, 2023. Under this law, Baghdad allocated 58.3 trillion Iraqi dinars to the Kurdistan Region. However, federal authorities transferred only 24.3 trillion dinars during the period. As a result, the region received just 41% of its legal share. This gap created a shortfall of nearly 34 trillion dinars.
Consequently, the ministry warned that the ongoing KRG budget dispute with Baghdad has placed heavy financial pressure on the region. Public services have suffered as funding shortages increased. Moreover, salary payments, infrastructure maintenance, and overall economic stability now face growing risks. Officials say continued underfunding could further deepen social and economic challenges.
In addition, the report shows that the Kurdistan Region’s share of Iraq’s total spending has fallen to record lows. Over the past three years, the region received only 3.9% of Iraq’s total public expenditure. This level remains far below what the KRG considers its constitutional and legal entitlement. According to the ministry, this decline reflects a widening financial imbalance between Erbil and Baghdad.
Most notably, the report highlights the complete exclusion of the Kurdistan Region from the federal investment budget. Baghdad allocated about 165 trillion dinars for national infrastructure and development projects across Iraq. Yet, federal records list the Kurdistan Region’s share as zero.
The KRG described this exclusion as a full investment blockade. Officials stated that the KRG investment blockade has halted major development projects across the region. As a result, roads, energy projects, hospitals, and public facilities have all faced delays. Furthermore, the lack of investment funding has reduced job creation and slowed economic growth.
Finally, the ministry warned that the continued KRG investment blockade places long-term pressure on the region’s economy. It also weakens national development and economic fairness. Therefore, officials called on Baghdad to respect the federal budget law and restore the Kurdistan Region’s full financial rights.
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