Following the approval of Iraq’s Federal Budget Law on June 21, 2023, covering fiscal years 2023, 2024, and 2025, the Kurdistan Region’s financial entitlements were formally set after extended negotiations with the Federal Government of Iraq.
However, a significant gap has emerged between the Kurdistan Region’s legally defined entitlements and the amounts actually disbursed. Data show that while the Region was entitled to approximately IQD 58.3 trillion over this period, it received only IQD 24.3 trillion—about 41 percent of its due funds and roughly 3.9 percent of Iraq’s total federal budget during the same timeframe.
Despite federal allocations of roughly IQD 165 trillion for national investment projects, the Kurdistan Region did not receive any investment funding, forcing the suspension of numerous infrastructure and development initiatives.
In the oil sector, the suspension of exports in March 2023 caused combined losses exceeding USD 25 billion for Iraq and the Kurdistan Region. Although exports resumed in late 2025, with over 19.5 million barrels sold through the State Organisation for Marketing of Oil (SOMO), delays and obstacles in the regular payment of public-sector salaries persisted throughout the period.
Between 2023 and 2025, salary allocations for public-sector employees in the Kurdistan Region were not fully disbursed, resulting in months of unpaid entitlements. Nevertheless, the KRG continued to fulfill its federal obligations, including transferring IQD 919 billion in non-oil revenues to the federal treasury in 2025.
