Iraq’s 2018 draft budget was sent to parliament with cuts to the Kurdistan Region’s allocation in place, according to a member of the parliament financial committee.
Majida al-Tamimi said that the Kurdistan Regional Government’s share of the 2018 budget remains at 12.6 percent in the new draft, down from its constitutional entitlement of 17 percent, Rudaw reported on Thursday.
Mr. al-Tamimi said KRG civil servants’ salaries will be reduced by 3.8 percent, and the cost of a barrel of oil has been set at $46.
KRG Prime Minister Nechirvan Barzani rejected the earlier draft budget as unconstitutional, and said the Kurdistan Region was prepared to “hand over oil, airports, border gates, and all revenues to Baghdad” if the Iraqi government would meet the 17 percent allocation.
According to Mr. Barzani, the funds would also be distributed directly to the three Kurdistan Region provinces, undermining the KRG’s power to distribute the money.
The budget was written without input from Kurdistan officials, he said.
Officials are forecasting Iraq’s budget deficit for this year to be below 10 trillion dinars ($8.5 billion) and 19 trillion dinars next year.
On Sunday, Iraq central bank Governor Ali Al-Allaq said Baghdad will try to raise $2 billion next year to finance its budget deficit. In an interview with Bloomberg, Mr. Al-Allaq said Iraq is planning a bond sale and will seek to raise money through foreign and local loans.
Parliament speaker Salim al-Jubouri said on Wednesday that MPs will vote on the final budget in January.