On Dec. 23, Iraq's Cabinet approved and submitted the 2015 federal budget to parliament. This development occurred following months of study to review and reduce the initial budget’s large deficit, which Finance Minister Hoshyar Zebari estimated at $40 billion.

Iraq’s government has certainly tried to address the deficit in the version that was approved on Dec. 23, in which the budget reached 123 trillion Iraqi dinars (nearly $100 billion). Yet, in the end, all of these attempts cannot address Iraq’s budget crisis for 2015 or the following years, given the nature of the Iraqi economy, which mainly depends on oil production, as well as the ongoing failure to achieve alternative economic mechanisms.

The sharp decline in oil prices, which reached $70 per barrel in December and are expected to continue falling, was enough to plunge Iraq into a real financial crisis, according to deficit rate estimations, which in 2013-14 were based on an estimation of nearly $80-$90 per barrel.

Mazhar Mohammed Saleh, economic adviser to the prime minister, told Al-Monitor, “Oil prices estimations were changed in the 2015 budget, and were based on the price of $60 per barrel, according to the current oil production ceiling, which could be up to 3 million barrels in 2015.”