Baghdad – INA
The Prime Minister’s Financial Adviser, Mudhher Mohammed Salih, affirmed on Tuesday that adopting a borrowing and grants law would serve only as a temporary measure to ensure the continuation of government spending until the state budget is approved, stressing that it is not a permanent replacement for the general budget. He also noted that fluctuations in oil prices and rising public expenditure increase the need for borrowing to finance the budget deficit.
Salih told the Iraqi News Agency (INA) that “if a borrowing and grants law is adopted in place of the budget law, the government will resort to a temporary financing mechanism that enables it to continue covering essential expenditures and meeting its financial obligations until the general budget is approved.”
He added that “this mechanism includes domestic borrowing through the issuance of treasury bills or bonds subscribed to by local banks and financial institutions. It may also include external borrowing from international financial institutions or donor countries, in addition to benefiting from international grants provided by regional and international entities to finance specific projects or sectors.”
He explained that “the nature of the financing is not necessarily limited to domestic borrowing, but rather depends on the scale of financing needs, the availability of liquidity, borrowing costs, and the legal framework that allows the government to use these instruments.”
Salih pointed out that “resorting to this option instead of passing the budget law is generally linked to delays in approving the budget and the resulting absence of the legal authority required for government spending. This compels the government to seek temporary financing tools to ensure the continued payment of salaries, the funding of public services, and the fulfillment of urgent financial commitments.” He added that “limited liquidity or declining public revenues—particularly amid volatile oil prices and expanding expenditures—may further increase the need for borrowing to cover the deficit and secure the necessary financing.”
He stressed that “adopting a borrowing and grants law is not a permanent alternative to the budget, but rather an exceptional and temporary measure aimed at ensuring the continuity of state institutions until the constitutional and legislative procedures for approving the general budget are completed.”