Finance Ministry Tops Iraq’s Government Spending as Administrative Expenditures Surge to 58 Trillion Dinars

ERBIL (Kurdistan24) – A comprehensive financial report released on Saturday has shed light on the massive scale of government expenditure in Iraq, revealing that the nation’s ministries consumed a staggering 58 trillion dinars in administrative costs during the first eight months of 2025. The data, published by the Eco Iraq Observatory, identifies the Ministry of Finance as the country’s highest spender by a significant margin, raising fresh concerns among economic monitors regarding the sustainability of public sector outlays and the mounting pressure on the general budget.

The Eco Iraq Observatory, an independent body monitoring the country’s economic indicators, released its findings on November 22, 2025, offering a granular look at the financial footprint of the Iraqi state apparatus.

The report details the expenses incurred from the beginning of the year through the end of August, capturing a period of significant fiscal activity. According to the Observatory’s analysis, the total administrative expense across all ministries—a figure that encompasses not only the colossal public sector payroll but also the procurement of goods and services—reached the 58 trillion dinar mark.

This aggregate figure highlights the immense operational costs required to keep the Iraqi government functioning, prompting warnings from the Observatory about the dangers of unchecked and unnecessary spending.

Dominating the list of expenditures is the Iraqi Ministry of Finance, which the report ranks in the first position. The ministry’s spending was recorded at an immense 16,222,206,035,523 dinars (approximately 16.2 trillion dinars).

This figure places the Finance Ministry far ahead of its governmental counterparts, reflecting the central role it plays in the management of the state’s economy, though the Observatory emphasized that these figures represent administrative expenses broadly defined.

Following the Ministry of Finance, the security sector commanded the second-highest portion of the budget. The Ministry of Interior, responsible for internal security and policing across the federal provinces, reported expenses totaling 8,889,453,826,753 dinars (8.8 trillion dinars). This substantial allocation underscores the continued prioritization of internal stability and the vast human resources employed by the police and security services.

The education sector occupied the third rank, reflecting the massive scale of Iraq’s schooling system. The Ministry of Education’s expenses for the eight-month period stood at 7,849,890,573,104 dinars (7.8 trillion dinars).

The Observatory was keen to clarify in its statement that these high expense figures across the top ministries are not solely attributable to employees' salaries, although the public payroll is a major factor. The data includes a wide array of operational costs, including the purchase of goods and services necessary for the ministries to execute their mandates.

The report also highlighted the significant financial footprint of the national defense apparatus. The Ministry of Defense came in fourth, with expenditures reaching 5,563,491,761,998 dinars (5.5 trillion dinars), further cementing the security sector as a dominant consumer of state funds.

Immediately following Defense was the Ministry of Health, which spent 4,814,088,863,274 dinars (4.8 trillion dinars) as it continued to manage the nation's public health infrastructure and medical services.

The social welfare and economic support sectors also recorded multi-trillion dinar expenses. The Ministry of Labor and Social Affairs reported spending 4,216,415,226,176 dinars, while the Ministry of Trade, which manages the country’s food rationing system and other commercial regulations, spent 3,438,115,022,802 dinars.

The Ministry of Electricity, a critical service sector often under public scrutiny, recorded expenses of 3,362,849,238,010 dinars.

Moving down the list, the Ministry of Higher Education and Scientific Research, which oversees the nation's universities and institutes, reported expenses of 2,024,460,885,734 dinars. A significant drop in expenditure scale was observed after the multi-trillion dinar ministries.

The Ministry of Justice reported 580,600,616,986 dinars in expenses, closely followed by the Ministry of Industry and Minerals at 559,629,436,806 dinars.

The report detailed the expenses of service-oriented and resource-management ministries as well. The Ministry of Construction, Housing, and Municipalities recorded 190,292,463,884 dinars in spending.

Similarly, the Ministry of Water Resources, tasked with managing the country’s critical water infrastructure amid ongoing environmental challenges, spent 188,947,992,007 dinars. The Ministry of Agriculture’s administrative expenses were listed at 124,999,797,889 dinars.

In the realm of diplomacy and culture, the Ministry of Foreign Affairs spent 122,413,456,274 dinars maintaining Iraq’s international relations. The Ministry of Culture recorded 74,170,760,547 dinars, while the Ministry of Youth and Sports spent 64,033,424,332 dinars.

The lower tier of the expense list included the Ministry of Transport at 45,902,334,624 dinars and the Ministry of Planning at 37,761,353,035 dinars. The Ministry of Migrants and Refugees, dealing with the displaced population, recorded expenses of 36,951,027,705 dinars. Notably, the Ministry of Oil, despite being the source of the vast majority of Iraq’s revenue, was listed with administrative expenses of 33,947,856,299 dinars in this specific report.

The Eco Iraq Observatory concluded its ranking by identifying the ministries with the lowest administrative burdens.

The Ministry of Environment recorded 30,263,724,104 dinars, while the Ministry of Communications was identified as having the least expenses, totaling 7,038,662,437 dinars. In its closing assessment, the Observatory warned that the continuation of unnecessary expenses poses a high pressure on the general budget, urging fiscal prudence as the government moves forward.

A Budget Consumed by Payroll and Security at the Expense of Development

The financial data released by the Eco Iraq Observatory offers a stark diagnostic view of the structural imbalances currently plaguing the Iraqi economy. While the raw numbers detail administrative outlays, the distribution of these funds reveals a government heavily burdened by operational costs, specifically in the security and finance sectors, with comparatively negligible investment in the developmental ministries essential for the country’s long-term diversification.

The most glaring disparity in the report is the chasm between security spending and infrastructure investment. When the expenditures of the Ministry of Interior (8.8 trillion dinars) and the Ministry of Defense (5.5 trillion dinars) are combined, the security apparatus accounts for over 14.3 trillion dinars of the reported spending. In sharp contrast, the ministries responsible for the physical rebuilding of the nation and its food security—Water Resources, Agriculture, and Construction and Housing—spent a combined total of approximately 504 billion dinars.

This represents a ratio where for every dinar spent on administering water, farming, and housing combined, roughly 28 dinars are spent on the administration of security forces.

This imbalance underscores a persistent reality: despite the defeat of major insurgencies, the Iraqi state’s budget remains fundamentally securitized, leaving little fiscal room for the vital infrastructure projects needed to combat climate change or modernize the economy.

Furthermore, the dominance of the Ministry of Finance at the top of the list, with over 16.2 trillion dinars, points to the centralized and cumbersome nature of Iraq’s fiscal management.

While some of this figure likely encompasses debt servicing and cross-ministerial transfers, its magnitude relative to service ministries highlights the cost of maintaining the state’s financial machinery.

Similarly, the Ministry of Education’s third-place ranking (7.8 trillion dinars) is indicative of the state’s role as the primary employer of last resort; the figure reflects the massive payroll of teachers and administrators across the country rather than direct investment in educational infrastructure, which would likely fall under different investment budget headings.

The Observatory’s warning regarding "unnecessary expenses" and "high pressure on the general budget" is particularly salient given the total of 58 trillion dinars in just eight months.

Annualized, this burn rate suggests an administrative overhead that consumes a vast majority of the nation's oil revenues, leaving the government vulnerable to any fluctuation in global crude prices.

If administrative costs—salaries and goods—continue to devour the lion's share of the budget, the "borrowing" capacity mentioned in broader economic discussions will be used merely to keep the lights on, rather than to fund the strategic projects necessary to transition Iraq away from its oil dependency.

The low administrative spending of the Ministry of Oil (33 billion dinars) is an outlier that reflects the unique structure of the sector, where operational costs are often handled through state-owned companies or cost-recovery mechanisms with international firms, masking the true cost of the industry that funds the rest of these extensive government outlays.