Iraq Approves Austerity Measures

Prime Minister Mohammed Shia Al-Sudani chaired an extraordinary meeting of the Ministerial Council for the Economy, approving a package of measures aimed at reducing government spending and increasing revenues.

Decisions included an urgent review of salaries and allowances for the three presidencies, with instructions to equalise benefits at the Presidency and Parliament with those of the Prime Minister's Office, alongside updating proposals for a unified public-sector pay scale.

Overseas travel allocations for state employees will be cut by 90%, limited to essential cases with ministerial approval. The Council also approved lower supervision costs for new projects and the introduction of a national import programme restricted to essential goods.

The Council agreed to recommend revising wheat subsidies so that government support does not exceed 170% of global market prices, and tasked the Minister of Trade with reforming the food ration card system to better target vulnerable groups.

On revenue enhancement, Al-Sudani directed a review of how non-oil revenues from the Kurdistan Region are calculated and transferred, in coordination with the Kurdistan Regional Government. Measures also included strengthening the pre-arrival customs declaration system in coordination with the Central Bank of Iraq, improving electricity bill collection, reviewing tariffs, and expanding automation and mandatory electronic payments across government services, including electricity, Baghdad Municipality and local authorities nationwide.

The recommendations were subsequently approved by Cabinet.