Finance Ministry releases 2023 end-of-year report

The latest figures released by the Finance Ministry in early March reveal a notable uptick in government spending leading up to the conclusion of the 2023 fiscal year. However, despite this surge, the government's expenditures remained significantly below the budget ceiling, largely due to delays in passing the budget law last year.

According to the end-of-year financial report, the government disbursed a total of 142.4 trillion IQD in 2023 and generated revenues of 135.7 trillion IQD, resulting in a deficit of 6.7 trillion IQD. In contrast, the 2023-25 budget law had set total expenditure at 199 trillion IQD, with projected revenues of 134.5 trillion IQD.

The formal approval of spending aligned with the 2023-25 budget only materialized in August last year. During the period between September and November, the government averaged around 15 trillion IQD in monthly expenditures, but in December, this figure surged to 33 trillion IQD.

A significant portion of this increased spending was allocated to the oil ministry to fulfill contractual obligations with oil companies and cover operational expenses for the Ministry of Electricity. Additionally, above-average expenditures were directed towards debt servicing and budget transfers to the Ministry of Agriculture.

Last year's spending on salaries amounted to 47.2 trillion IQD, a figure projected to escalate to nearly 60 trillion IQD this year in alignment with the current budget ceiling. Notably, the government's emphasis on expanding social welfare, including social security, pensions, and food rations, was evident in the utilization of its entire allocation of 25 trillion IQD.

While revenues from oil sales last year surpassed projections in the budget law by 7%, the shortfall in non-oil revenues was substantial. Actual non-oil revenues amounted to just under 10 trillion IQD, falling short of the 17.4 trillion IQD target outlined in the budget law. This discrepancy underscores challenges in collecting customs revenues and transforming state-owned enterprises into profitable entities.

With the completion of the end-of-year financial report, the government is now poised to present its spending proposals for the current year. MPs are eagerly anticipating the revised budget tables promised by the finance minister, expected to be submitted to parliament in the forthcoming weeks.