Iraq’s cabinet has approved a draft budget law for 2023 to 2025, which will now be referred to parliament for approval and possible amendment, the Prime Minister's office said.
This year's budget stands at 197.82 trillion Iraqi dinar, about $152.17 billion, Prime Minister Mohammed Shia Al Sudani said on Monday.
The budget will run with a deficit of 63.27 trillion dinar, or about $48.67 billion, Mr Al Sudani said.
The operational expenditure stands at 150.27 trillion dinar, or about $115.59 billion, while investment expenditure will be 47.55 trillion dinar, or about $36.58 billion.
The budget calculations are based on an assumed oil price of $70 a barrel, with average daily crude oil output of 3.5 million barrels, including 400,000 barrels from the Kurdistan region.
“This budget will be repeated for three years with the possibility of changing the numbers after the approval of the cabinet and parliament”, Mr Al Sudani said.
He described the move to prepare a budget for three years as “bold”, adding that it will support financial stability and prevent any delay in spending by the end or beginning of each year.
This is the first time Iraq is proposing a multi-year budget, having typically passed one-year budgets, except in times of political deadlock.
Last year, the country's caretaker government failed to pass a budget amid political wrangling, forcing the interim parliament, which has limited access to funds, to pass a $17 billion emergency package called the “Food Security and Development Bill”.
Iraqi law allows only reduced operational expenditure under caretaker governments, which has delayed vital infrastructure spending at a time when oil prices have reached record highs.
The emergency funds passed under the caretaker government of Mustafa Al Kadhimi were intended to meet some of the country's most pressing needs, which included a programme to subsidise food and improve electricity supply.
Since coming to office, Mr Al Sudani has made similar pledges to expand government spending and promised to hire another 100,000 graduates.
Government critics said this would only expand the operating expenses of the state without putting in place desperately needed infrastructure or creating sustainable jobs.
Iraq is Opec's second-largest oil producer and has benefitted from an increase in oil prices following Russia's invasion of Ukraine.
For months, officials have been hinting that a budget would be passed “soon”.
A new government was finally confirmed in October last year, with Mr Al Sudani saying that his government priority would be to pass the budget.