The new spending programme estimates overall expenditure at $81.86 bilion, or 96.6 trillion Iraqi dinars, while income will be $68.56 billion, leaving a shortfall of $13.3 billion-- about a 16 percent budget deficit.
Sunday's submission is based on average oil prices of $76.5 per barrel and projected exports of 2.2 million barrels of oil per day (bpd), a figure which includes 100,000 bpd of exports from the autonomous Kurdish region.
A previous draft budget, sent to parliament on December 1, estimated spending of $78.8 billion based on oil prices of $73 per barrel.
Of the overall spending in the new budget, $56.44 billion will be operating expenses -- primarily salaries and pensions for civil servants - and the remaining $25.42 billion will be dedicated to investment, government spokesman Ali al-Dabbagh said.
Energy sales are expected to account for 90 percent of revenues.
Dabbagh said the $13.3 billion deficit would be covered by "money accumulated from past surpluses and from internal and external loans."
He added that the cabinet also gave the green light for the finance ministry to request a $4.5 billion loan from the International Monetary Fund, and a further $2 billion from the World Bank.
While Iraq's projected oil price currently looks to be a conservative estimate -- prices currently stand at around $89 in New York -- its projected exports are more ambitious.
Iraq has not exported 2.2 million barrels per day of oil since the 2003 US-led invasion ousted dictator Saddam Hussein.
The country currently produces around 2.5 million bpd, with exports averaging around two million bpd, though the former figure is expected to rise to three million bpd by the end of the year, according to the oil ministry.