In modern conditions of development of both budgetary relations in the Republic of Iraq in particular, and the general development of the country's economy, a number of problems and difficult situations arise that need to be solved. The excess of the expenditure item over the income item contributes to the formation of a budget deficit, which creates the need for the state to identify additional sources of financing and level the state budget deficit. trying to minimize its costs depending on the geopolitical situation in the country. The article deals with the problems of regulating the state budget of the Republic of Iraq in modern market conditions, which consist in a constant increase in the volume of financial allocations and a decrease in the effectiveness of public spending, as well as the diversification of budget revenues; reducing the excessively high salary fund of civil servants and reforming the pension system, ensuring budget balance, its financial soundness.