Iraq Faces Deepening Economic Risk as 2026 Budget Delay Paralyzes Spending and Investment

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Political deadlock over premiership formation and federal negotiations stalls budget approval, raising fears of recessionary pressure, unemployment growth, and renewed Baghdad–Kurdistan fiscal tensions. Iraqi officials and lawmakers warned that continued delays in approving the 2026 federal budget could deepen economic losses, stall investment projects, and increase uncertainty in the market. Dr. Pshtiwan Faraj , Sulaimani, Iraq, April 2026  —  Iraq is facing growing warnings over the economic impact of delays in approving the 2026 federal budget, with officials saying the hold-up could slow growth and worsen uncertainty across the country. The ongoing dispute over the Iraqi premiership has slowed the constitutional process required to move the budget forward, leaving ministries without the legal framework needed to expand spending beyond basic operations. Without a fully empowered government, the draft budget cannot be formally approved and submitted to parliament. ...
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Launch of Inclusive Social Safety Net pilot in the Kurdistan Region of Iraq

 


Dr. Pshtiwan Faraj, Sulaimani, Iraq, April 2026  — Under the leadership of the Ministry of Labour and Social Affairs of the Kurdistan Regional of Government, UNHCR, UNICEF and the World Bank are supporting the launch of a Social Safety Net pilot in the Kurdistan Region of Iraq. The pilot will provide financial social assistance to 3,200 poor families, including 600 refugee households, over 12 months to help meet their basic needs.

Registration for families to express their interest in receiving assistance is open until 28 April 2026. Families can approach centres run by the General Directorate of Social Care and Development in Duhok to submit their details. The Ministry of Labour and Social Affairs, in collaboration with the Ministry of Planning, will then select eligible families based on specific poverty targeting criteria. Financial social assistance transfers are expected to begin in mid-2026.

"This pilot represents a meaningful step forward in supporting the Kurdistan Regional Government's poverty reduction efforts, introducing poverty-targeted cash assistance to the Region for the first time. In parallel, a Management Information System is being established to ensure the effective and efficient delivery of the pilot, with the potential to support social programs in the future. This is an important stride toward building an inclusive and sustainable social protection system." said Emanuel Salinas Munoz, World Bank Special Representative for Iraq.

Social Safety Nets, a core pillar of social protection, have not been operational in the Kurdistan Region of Iraq since 2015. With World Bank technical assistance and funding by the Government of the Netherlands as part of the PROSPECTS partnership, the Ministry of Labour and Social Affairs has worked on updating frameworks to re-establish the Social Safety Net. Ahead of the pilot, UNHCR has provided technical support to facilitate the inclusion of refugees, while UNICEF strengthened child-sensitive systems by enhancing case management for vulnerable families and linking services through a unified information system.

Including refugees in the Social Safety Net is an important step marking the transition from their dependence on humanitarian assistance to inclusion in national systems. The Kurdistan Region of Iraq currently hosts around 283,000 refugees and asylum seekers, mainly Syrians, many of whom have lived in the region for over a decade. For the most vulnerable refugees, such the elderly and people with disabilities, sustained financial support is critical to rebuilding lives and contributing to their communities on a long-term basis.

“Refugee inclusion within national social protection systems like the Social Safety Net is a key part of sustainable solutions for refugees. At UNHCR, we are excited to partner with the Ministry of Labour and Social Affairs to support this pilot which is a regional first and hope that its success can lead to further expansion of an inclusive Social Safety Net in Iraq,” said Toby Harward, UNHCR Representative in Iraq.

“This pilot will help improve social protection in the Kurdistan Region of Iraq so it better supports children’s rights, responds to shocks and reaches the most vulnerable. By strengthening existing systems, assistance can be delivered more quickly and safely, while social workers can focus on case management, which is essential for protecting children effectively,” said Christian Skoog, UNICEF Representative in Iraq.

The initiative contributes to the United Nations support to Iraq’s development under the UN Sustainable Development Cooperation Framework 2025-2029. Strong, inclusive social protection systems—grounded in robust policies and legislation—are critical to delivering equitable and sustainable support for all populations in Iraq.

#Kurdistan #Iraq #SocialProtection #UNHCR #UNICEF #WorldBank #PovertyReduction #Refugees #SocialPolicy #Development

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