The World Bank said on Monday that the Iraqi government has a clear direction toward implementing financial reforms, stressing the importance of improving the state budget and expanding revenue sources to strengthen fiscal sustainability.
The remarks came during a meeting between the Parliamentary Finance Committee, chaired by MP Adi Awad, and a World Bank delegation led by Sandeep Mahajan, Regional Director for Prosperity in the Middle East, North Africa, Afghanistan and Pakistan. The meeting focused on Iraq’s financial situation and mechanisms for improving the budget process.
The discussions covered plans to gradually shift from line-item budgeting to program- and performance-based budgeting, as well as efforts to diversify export routes for Iraqi goods and reduce reliance on the Strait of Hormuz. The sides also discussed increasing non-oil revenues and modernizing the tax system through digital automation.
The Finance Committee highlighted the importance of maintaining cooperation with the World Bank and benefiting from its expertise in supporting the Iraqi government and developing financial and economic mechanisms to help establish a more efficient fiscal policy.
The World Bank delegation said the budget represents a key instrument for managing fiscal policy, noting that improving Iraq’s financial position requires stronger revenues and institutions capable of implementing modern financial systems and improving public spending efficiency.
The two sides also explored the possibility of introducing performance-based budgeting gradually, beginning with selected provinces and institutions, while assessing the results before expanding the approach nationwide.
Both sides agreed to continue exchanging expertise and monitoring developments in Iraq’s financial sector, while strengthening technical assistance and organizing specialized training programs on program- and performance-based budgeting.
