The Impact of the Exchange Rate on Iraq’s Public Budget for the Period 2010–2024

This research investigates the impact of exchange rate fluctuations on Iraq’s public budget over the period 2010 - 2024. It examines how these fluctuations influence public revenues, public expenditures, the resulting budget surplus or deficit. The research employs a quantitative analytical methodology, utilizing advanced econometric tools with EViews 12 software to test the relationship between the research variables. This includes statistical data analysis following the PP and ADF tests, Autocorrelation, Johansen Cointegration Test, Granger Causality Test, impulse response analysis (IRF), and variance analysis, using official data from the central bank of Iraq and the Ministry of Finance. The study from the fact the influence of the exchange rate on the imports of both essential and luxury goods, as well as the extent to which the exchange rate and the public budget are affected by internal and external shocks to the Iraqi economy. The results indicate an abiding between the exchange rate and components of the public budget, revealing that the effect of the exchange rate on revenues (coefficient =210.7) is greater than its effect on expenditures (coefficient = 93.1). This reflects the Iraqi economy's dependence on revenues, making exchange rate stability a crucial factor in achieving budget balance.