Hundreds of Iraqi contractors gathered outside the finance ministry in Baghdad on Monday to protest over unpaid deals with the government.

"We came from all over the country. We did our job but we never got paid and now we owe our own suppliers," Thaer Ali, who owns a construction firm in Wasit province south of the capital, told AFP.

According to the demonstrators, the government has for two years failed to honour contracts it signed with scores of companies for infrastructure projects such as schools, roads and hospitals.

Iraq has suffered a major budget crunch caused by a huge slump in oil prices and by the cost of the war to retake the third of the country the Islamic State group seized in 2014.

"We've been patient because we know Iraq was going through a rough patch with IS, but the situation is better now and oil prices have gone up again," said Rawhi al-Araji, vice-president of the Iraqi Contractors' Federation.

"We demand rapid payment for these contracts, just as the government would do with foreign companies," he said, adding that at least a first instalment of 40 percent of what federation members are owed should be paid.

The federation estimated the government owes its contractors a massive $12 billion (11.3 billion euros).