Iraqi PM Haidar al-’Abadi’s cabinet approved the country’s 2016 budget on 18 October. The bill called for spending of ID106 trillion ($88bn at $1=ID1,200). This is 10% less than the $97bn in spending projected by the Finance Ministry’s original draft (MEES, 9 October), and follows extensive criticism of that draft’s lack of fiscal realism from parliamentarians and commentators.

The projected deficit of ID23 trillion ($19bn) is purely theoretical as Iraq does not have the ability to borrow this amount. For 2015 the government has maxed out what domestic banks can loan, and has recently backed off efforts to sell bonds internationally over high rates demanded. (CONTINUED - 324 WORDS)