The Kurdistan Regional Government says Baghdad has paid only 41% of Kurdistan’s financial entitlements over the past three years, warning that the shortfall has created what it calls an “investment blockade” and serious financial pressure on the Region.
In a statement released on Tuesday, the KRG’s Department of Media and Information said that under Iraq’s federal budget law approved on June 21, 2023, Kurdistan’s share for the years 2023 to 2025 was agreed through understandings between Erbil and Baghdad. But according to the KRG, the money that actually arrived was far less than what was promised.
The KRG said Kurdistan was allocated 58.3 trillion Iraqi dinars—about $44.8 billion—over the three-year period. However, it received only 24.3 trillion dinars, or about $18.7 billion. That equals 41% of its dues and just 3.9% of total federal budget spending.
The statement also said that while Baghdad set aside 165 trillion dinars—around $126.9 billion—for investment projects across Iraq, Kurdistan received none of it. As a result, many infrastructure and development projects in the Region have been stalled.
On the oil front, the KRG said the halt of Kurdistan’s oil exports in March 2023 caused losses of about $25 billion to Iraq’s overall economy. After exports resumed in late 2025, Kurdistan exported 19.5 million barrels through Iraq’s state oil marketer, SOMO. Even so, the KRG said problems with transferring public sector salaries continued.
According to the statement, federal authorities failed to fully pay salaries in the Region throughout 2023, 2024, and 2025, leading to months of unpaid wages. The most recent salary payment from Baghdad covered October 2025 and was transferred on December 28, 2025, totaling 942.8 billion dinars, or about $725 million.
The KRG added that it has met its own obligations. In 2025, it transferred 919 billion dinars—around $707 million—in non-oil revenues to the federal treasury.
So far, Baghdad has not publicly responded to these claims.
Under existing agreements, the KRG is required to hand over its oil and non-oil revenues to the federal government. In return, Baghdad is supposed to provide Kurdistan’s financial entitlements—especially salaries. According to the KRG, that balance has not been upheld.
