Financial free fall threatens Kurdistan’s stability, oil sector

In an era of depressed oil prices and budget disputes, the KRG has lost most of the revenue that underwrites its economy, and has no clear plan for bridging its deficits.
KRG Prime Minister Masrour Barzani chairs a meeting of his Cabinet on May 13, 2020 in Erbil. (Photo credit: Kurdistan Regional Government)

Iraq's semi-autonomous Kurdistan Regional Government (KRG) is descending into a deep financial crisis with the potential to undermine social stability and oil investment.

Because of low oil prices, pandemic-related disruptions, and political disputes with Baghdad, the KRG's total revenues fell below $200 million in April, according to an Iraq Oil Report analysis of oil and financial data* – about 12 percent of its average monthly revenue in 2019, and about $1.3 billion short of the cash required to meet expenses.

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