Iraq’s parliament on Monday approved a 2023 budget of 198.9 trillion dinars ($153 billion) that sets out record spending on a growing public wage bill and development projects to improve services and rebuild infrastructure ruined by neglect and war.

The budget deficit is estimated at a record 64.36 trillion Iraq dinars, more than double the last budget deficit in 2021, according to a budget document and lawmakers.

The budget is based on an oil price of $70 per barrel and projects oil exports at 3.5 million barrels per day (bpd), including 400,000 bpd from the semi-autonomous Kurdistan region, lawmakers said.

The budget sets the exchange rate for oil revenues in US dollars at 1,300 dinars per dollar.

It will remain valid through 2025, though it is subject to amendment, including to the oil price it uses given its near-total dependence on oil revenue.

The budget adds more than half a million new public sector workers, hiring that flies in the face of the recommendations of many observers who say Iraq should tighten fiscal policy.

Mohammed Nouri, a member of the parliament’s finance committee, told Reuters ahead of the session more than a million new workers were added, including contractors, daily employees and full-time staff.

Ahmed Tabaqchali, a visiting fellow at the London School of Economics Middle East Center, put the figure of new employees at about 600,000, which he said would raise the total cost of public wages and pensions to more than $58 billion (76 trln dinars).

Source: Agencies