Kurdistan Region’s economic challenges in 2023

ERBIL, December 28 — In 2023, the Kurdistan Region grappled with challenging economic conditions marked by various events affecting its populace. From salary delays to soaring fuel prices and fiscal constraints, the economic challenges were palpable.

1. Salary delays

The Kurdistan Regional Government (KRG), which pledged salary distributions on the 25th of each month, managed to fulfill this commitment only nine times throughout the year, disbursing salaries on different dates.

2. Teachers protests due to delayed salaries

School teachers in districts across Sulaymaniyah, Halabja, Garmiyan, Raperin, and Koya engaged in protests lasting over three months, boycotting the education process due to non-payment of their salaries.

3. Temporary contractors joined demonstrations

Employees on temporary government contracts across various parts of the Kurdistan Region organized several demonstrations and protests, advocating for permanent employment by the KRG.

4. Rising fuel prices

Fuel prices, particularly for gasoline, surged significantly this year, with regular octane gasoline reaching 800 to 900 dinars per liter, midgrade priced between 1,300 to 1,500 dinars, and super gasoline ranging from 1,500 to 1,700 dinars. These increases prompted driver protests in several areas.

5. Dollar price elevation

The U.S. dollar exchange rate against the Iraqi dinar surged to 176,000 dinars per $100, deviating substantially from the official bank rate of 132,000 dinars.

6. Citizen tax increases

As the average citizen struggled with the region’s economic realities, the government implemented tax hikes, prompting protests in multiple locations.

7. Suspension of oil exports

The Kurdistan Region’s oil exports through the Ceyhan Port have been suspended since March 25, with no specified date for resumption.

8. An international film festival is cancelled

The Sulaymaniyah International Film Festival announced in November that it would not hold events due to budgetary constraints.

9. Electricity challenges 

The KRG was able to sell electricity to other areas of Iraq, ensuring up to 20 hours of continuous power for those districts, while local areas inside the Kurdistan Region encountered shortages, resulting in restricted electricity hours.

10. Fuel distribution
With the onset of winter, the KRG provided residents with oil, offering 200 liters for 104,000 dinars. However, this move prompted significant concern among locals, with many refusing to accept the subsidized fuel, asserting that the government was selling oil to them, rather than distributing it.

11. Iraqi budget approval

The Iraqi budget law — the most substantial budget in Iraq’s history — received approval from the central government’s on June 21, 2023. Kurdistan’s allocated share was determined to be 12.67 percent, with an estimated oil price set at $70 per barrel.