Latest Finance Ministry figures reveal surge in KRG transfers

The Finance Ministry’s latest spending figures from March reveal larger than expected payments to the KRG to cover salaries.

A total of 1.68 trillion IQD was transferred to the KRG in March, with just under 1.2 trillion IQD allocated for the salaries of KRG employees and pensioners. This figure is significantly higher than what has been publicly reported and announced previously by the Sudani government.

In early March, the government said that it had transferred 560 billion IQD to cover KRG salaries for the month of February. This prompted a response from the KRG, which claimed that the funds were insufficient and that it needed 945 billion IQD. Then on April 4, the Finance Ministry stated that it had transferred budget payments to cover KRG salaries for the month of March, without revealing how much.

The Finance Ministry’s latest budget spending figures, which cover only up to March 31, reveal that the total funds transferred that month were three times higher than what was publicly known. It is not clear whether the 1.68 trillion IQD was transferred in several tranches, whether it was meant to cover just the KRG’s February budget, or if it included back payments for previous months. What is clear is that the Sudani government and his Coordination Framework backers have sought to appease the KRG, as evidenced by Sudani’s recent meetings with Nechirvan Barzani.

Furthermore, the March figures show that the government achieved a 2.2 trillion IQD budget surplus, with higher-than-average non-oil revenues from taxation and customs fees. Despite the large sums transferred to the KRG, overall spending was within typical range, owing to the fact that the government committed very little to debt servicing in March.

Meanwhile, capital spending remains held up until the government submits its amended 2024 budget to parliament for approval, so investment spending was only a fraction of last year’s monthly average.