The Iraqi Council of Representatives voted on Monday by a majority on the federal budget law for the current year and for the next two years in a session that began late last night and extended until the early hours of the morning.

The vote on the budget articles took 4 consecutive parliamentary sessions, due to differences between political forces over paragraphs related to the Kurdistan region, its oil revenues and the distribution of salaries of employees in the region.

The vote follows a dispute over the mechanism for distributing financial imports from oil exports from the Kurdistan Region of Iraq.

After the vote, KDP Chairman Massoud Barzani expressed regret over the passage of the budget law, describing what happened inside the House of Representatives as irresponsible and unconstitutional attempts aimed at deepening problems and violating the legitimate rights of the Kurdish people.

Barzani said in a statement that the passage of the law came contrary to the agreement concluded earlier between the regional government and the Baghdad government, adding that "it strongly opposes any attempt that seeks to bypass and undermine the entity of the Kurdistan region," stressing that "the Kurdistan region is not only a red line, but a line of death."

Iraq's budget deficit is estimated at $48 billion, a record high (Reuters)

What does the budget include?

Iraq's budget for this year is $153 billion, and includes record spending on a growing government wage bill and development projects aimed at improving services and rebuilding infrastructure.

The budget deficit is estimated at $48 billion, a record high and more than double the last budget deficit recorded in 2021.

Lawmakers said the budget was based on a price of $70 a barrel of oil and an export forecast of 3.5 million barrels per day, including 400,<> barrels from the Kurdistan region of Iraq.

The budget sets the exchange rate for oil revenues in U.S. dollars at 1300,2025 dinars to the dollar, which will remain in effect until <> but will be adjustable, including the price of oil used by Iraq in light of its almost complete dependence on oil revenues.

The budget adds more than half a million new jobs to the public sector, contradicting the recommendations of many observers who say Iraq should tighten fiscal policy.

The budget also includes changes with regard to the agreement reached between Baghdad and Erbil last April to open the way for the resumption of the region's oil export through Turkey, and exports have stopped since last March after an international arbitration panel decided that gave Baghdad the right to manage the oil file in the region.

The International Monetary Fund warned in May against relying on Iraq's oil revenues, calling on Baghdad to "develop a tighter fiscal policy."