Iraq Economic News and Points To Ponder Sunday Afternoon 1-11-26
Iraq’s Non-Oil Revenues Hit Nearly $9B
2026-01-11 Shafaq News– Baghdad Iraq’s non-oil revenues have reached about 13 trillion dinars ($8.9B) but still fall well short of its economic capacity, lawmaker Shaimaa Abdul Sattar Al-Fatlawi said on Sunday.
Al-Fatlawi, a member of the National Al-Nahj (Approach) bloc, told Shafaq News that the total includes 2.5 trillion dinars ($1.7B) from direct taxes, 3.5 trillion dinars ($2.4B) from additional tax-related income, and 7 trillion dinars ($4.8B) from fees and other charges, describing the figures as inconsistent with Iraq’s scale of investment, trade, and agricultural activity.
Identifying the housing sector as a major missed revenue source, she noted that investment companies held around 200,000 residential units in 2024 with an average value of 70 million dinars ($47.8K) each. A 15% levy on those properties alone, Al-Fatlawi estimated, could yield nearly 7 trillion dinars, excluding private universities, hospitals, and large commercial projects.
She blamed the shortfall on weak enforcement and ineffective digital tax systems, calling for staff rotation, tighter oversight, and a comprehensive review of collection mechanisms.
Her comments come as lawmakers began gathering signatures on Saturday to overturn the caretaker cabinet’s Decision No. 97 of 2025 on new tax measures, arguing it violates Article 28 of the constitution and the Customs Tariff Law by imposing or changing duties without parliamentary approval. https://shafaq.com/en/Economy/Iraq-s-non-oil-revenues-hit-nearly-9B
Iraq Will Be Among The Arab Countries With The Lowest Inflation By The End Of 2025.
Money and Business Economy News – Baghdad Iraq recorded a low inflation rate by the end of 2025, according to data issued by the International Monetary Fund (IMF).
According to the data, Iraq was among the Arab countries with the lowest inflation in terms of price increases, at 1.5%. This level reflects relative stability in the local market, especially in the prices of basic commodities, compared to other countries that experienced significant inflationary pressures during the same year.
This decline in inflation rates is attributed to several factors, most notably the relative stability of the exchange rate, the improved availability of goods in the markets, and government measures related to imports and subsidies, which have contributed to reducing the rising cost of living for citizens, despite the continued regional and global economic challenges.
As for other Arab countries, Sudan topped the list of highest inflation rates at 87.2%, followed by Yemen and Egypt at 20.4% each, then Tunisia at 5.9%, Somalia at 3.6%, and Algeria at 3.5%, amid clear effects of the economic and political conditions in those countries.
In contrast, Arab countries recorded low inflation rates, most notably Jordan and Kuwait at 2.2%, Saudi Arabia at 2.1%, Libya at 1.8%, the UAE at 1.6%, Morocco at 1.2%, and Oman at 0.9%, while Bahrain came in at 0.3%, and Qatar had the lowest Arab inflation rate at 0.1% by the end of 2025. https://economy-news.net/content.php?id=64425
Iraqis Bear The Brunt Of Government’s Fiscal Crisis As Fees Surge
2025-01-26 03:17 Shafaq News/ The Iraqi government’s recent decision to impose increased taxes and service fees has sparked widespread criticism from citizens, lawmakers, and experts. The measures, intended to address Iraq’s growing budget deficit, have been criticized for disproportionately affecting low- and middle-income families, adding to the financial strain during an already challenging economic period.
Root Causes: Budget Deficit and Economic Dependency
Iraq’s economic challenges are deeply rooted in its dependency on oil revenues, which account for 90% of the country’s state income. This reliance has made the economy highly vulnerable to fluctuations in global oil prices, leading to recurring budget deficits. In 2023, Iraq faced a deficit equivalent to 7.7% of its GDP. Efforts to diversify income streams have been insufficient, with a modest 22% rise in tax revenues in 2024 failing to address a projected budget deficit of 64 trillion dinars ($49.3 billion).
The 2024 federal budget, estimated at 211 trillion dinars ($161 billion), assumes an oil price of $70 per barrel. While oil prices currently hover above this figure, fiscal constraints remain tight. Domestic borrowing has surged to over 70 trillion dinars ($53.8 billion) to cover operational expenses, underscoring the unsustainable nature of current fiscal policies. Experts warn that Iraq’s financial challenges could deepen in 2025 as global oil prices are expected to decline further.
Impact of Tax Hikes on Everyday Iraqis
The new taxes and fees target essential services, placing an immediate financial burden on Iraqi citizens. For example, utility bills now include a surcharge of 2,000 dinars (approximately $1.37), while notary fees have risen from 1,000 dinars ($0.68) to 20,000 dinars ($13.70). Court fees have tripled to 6,000 dinars ($4.11), leaving many struggling to keep up.
“Court fees used to be 1,000 or 2,000 dinars, but now they’ve surged to 6,000 dinars,” said Abu Aqeel, a resident of Karbala. “Families like mine simply cannot afford these sudden increases.”
The financial strain has led to public frustration and protests, with citizens decrying the government’s inability to address their economic hardships.
Government’s Defense: A Necessary Move?
The government has defended the fee increases as necessary measures to boost state revenues and address liquidity shortages. The proposed “Law on Service Fees” grants ministers, governors, and other officials the authority to impose or modify fees.
MP Mohammad Jassim Al-Khafaji emphasized the urgency of this law, stating, “The government insists on this law because the country’s financial situation is dire.”
Despite this defense, critics argue that the lack of transparency and accountability undermines public trust. “Amid allegations of corruption and wasteful spending, it is difficult to convince citizens that these fees are for their benefit,” Al-Khafaji added.
Expert Criticism: Economic and Legal Concerns
Economists have labeled the fee hikes as a regressive measure that neglects Iraq’s long-term stability. Mustafa Hantoush, an economic expert, warned that these policies deepen poverty, which already affects 40% of the population in some provinces. “Raising taxes and fees without addressing systemic inefficiencies only exacerbates inequality and poverty,” he told Shafaq News.
Hantoush urged the government to “focus on diversifying the economy by investing in agriculture, industry, and transportation to create sustainable jobs.” Additionally, he highlighted “systemic corruption” in key revenue streams, including oil sales and currency exchanges, as “a significant drain on public finances.”
Legal experts have also raised concerns about the constitutionality of the fee increases. Article 28 of Iraq’s Constitution requires taxes and fees to be imposed or amended through enacted laws.
Mohammed Jumaa, a legal expert, argued, “Imposing fees without legal approval is essentially an illegal tax on citizens,” calling on Parliament to block the legislation, describing it as “a violation of constitutional safeguards.”
Calls for Change and Sustainable Solutions
Lawmakers and labor committees urge the government to adopt alternative strategies that alleviate the financial burden on citizens. Jassem Al-Mousawi, a member of the Parliamentary Labor Committee, emphasized, “The focus should be on alleviating the financial strain on Iraqis, not exacerbating it.”
Al-Mousawi called for ministries to identify sustainable revenue sources, such as enhancing non-oil sectors and combating corruption. He also announced plans to “summon ministry representatives to ensure accountability and transparency in government spending.”
The Bigger Picture: Structural and Policy Challenges
The fee hikes are part of broader economic and structural challenges facing Iraq. While the government aims to diversify revenue streams, efforts have been slow and insufficient. Economists have repeatedly called for reforms to reduce dependence on oil revenues and address inefficiencies in public spending.
Corruption remains a significant obstacle, with billions of dollars lost annually due to mismanagement and embezzlement. Without addressing these systemic issues, experts warn that Iraq’s financial crisis will persist, with low- and middle-income families bearing the brunt of the burden.
Looking Ahead: Fiscal Challenges in 2025
As Iraq prepares for 2025, fiscal challenges are expected to intensify. Global oil prices are predicted to decline, further straining the country’s budget. In this context, the government’s reliance on measures like tax hikes may prove unsustainable, potentially fueling more public discontent.
To avoid a deeper economic crisis, Iraq must implement comprehensive reforms. These include diversifying the economy, reducing corruption, and improving transparency and accountability in public finances. Without such measures, the cycle of budget deficits and economic instability is likely to continue.https://www.shafaq.com/en/Report/Iraqis-bear-the-brunt-of-government-s-fiscal-crisis-as-fees-surge
From Burden To Strategy: Iraq Cuts Debt, Targets Growth
2025-07-09 Shafaq News – Baghdad Iraq is advancing a fiscal plan to reduce over $114B in public debt, aiming to enhance credit ratings, expand policy flexibility, and reallocate resources to long-term infrastructure development.
Domestic debt edged down in April to 85.5T IQD ($60.2B), from 85.53T ($60.23B) in March, according to Central Bank (CBI) data, after repayments to financial institutions, lowering their outstanding share to 19.11T IQD ($13.45B).
Additional internal liabilities include 756B IQD ($532M) owed by the Ministry of Finance, 51T IQD ($35.91B) in treasury transfers held by the central and commercial banks, 2.03T IQD ($1.43B) in ministry-backed treasury notes, and 12.57T IQD ($8.85B) in deferred payments, largely owed to farmers.
Foreign obligations have also declined. CBI reported on June 14 that Iraq’s external debt dropped to $54.6B in 2024, down 2.94% from $56.2B in 2023. About $9B is due by 2028, with an additional $9B linked to long-term loans from international reconstruction funds.
Debt Within Global Thresholds
Analysts highlight that Iraq’s debt ratios remain within safe international bounds. External debt constitutes less than 8% of GDP, placing Iraq in a low-risk category that supports credit stability and foreign investor interest.
Speaking to Shafaq News, Prime Minister's financial adviser Mudhhir Mohammed Saleh described the current policy direction as “fiscal consolidation,” where controlled debt growth aligns with reduced budget deficits, a central goal in the government's economic roadmap.
Decreasing reliance on borrowing, he added, "improves Iraq’s credit standing, lessens exposure to risk, and attracts foreign investment."
Additionally, easing internal debt alleviates pressure on local liquidity. “Lower sovereign borrowing allows commercial banks to extend more credit to the private sector, fueling domestic growth,” he noted.
Repayment Plans
Also speaking with Shafaq News, financial analyst Safwan Qusay proposed using state-owned assets to settle internal debt. “The Ministry of Finance can convert real estate into tradable shares and allocate them to creditors—removing interest burdens and preserving fiscal space.”
He added that Iraq’s external liabilities are mostly concessional, offering favorable repayment terms. "Demonstrating repayment ability enhances Iraq’s financial credibility and appeal to global investors."
Still, he cautioned against aggressive borrowing, even if global benchmarks allow debt up to 60% of GDP. “Iraq must use its resources wisely to avoid transferring today’s debt onto future generations.”
The World Stage
Placing Iraq’s debt within a global context, economist Karim al-Hilu told Shafaq News that sovereign borrowing is common among advanced economies. “The United States carries over $36T in internal debt, while Germany owes €2T."
"Domestic liabilities, denominated in local currency, are easier to manage. In contrast, external debts come with interest obligations and may expose a country to geopolitical pressures," he explained.
Al-Hilu emphasized that reducing debt levels will unlock funds for essential development. “Iraq needs over 1,000 strategic projects in transport, energy, and food security. Debt reduction can rechannel spending into these areas.”
However, he warned that fiscal gains alone won’t resolve deeper governance problems. “Administrative inefficiencies, political quotas, and corruption continue to block execution of approved plans,” he observed.
Even well-structured federal policies often stall at the local level. “Some tenders and investment projects require bribes to proceed, and provincial actors frequently obstruct implementation for partisan gain,” al-Hilu concluded.
Looking Ahead
Beyond immediate fiscal metrics, Iraq’s long-term financial outlook hinges on institutional credibility and transparent execution. Analysts emphasize that without reliable reporting standards and predictable budgeting cycles, credit agencies and investors may hesitate to reclassify Iraq into more favorable risk categories despite falling debt levels.
Another critical factor is the development of local capital markets. Strengthening domestic bond markets, improving regulatory oversight, and expanding non-oil revenue streams could give Iraq additional tools to manage debt sustainably without overreliance on external aid or emergency lending.
Iraq’s ability to balance debt reduction with inclusive growth will shape its role in regional economic dynamics. As global capital flows shift amid tightening monetary policies, countries like Iraq must demonstrate not only solvency, but also vision, transforming fiscal gains into enduring national development.
Written and edited by Shafaq News staff. https://www.shafaq.com/en/Report/From-burden-to-strategy-Iraq-cuts-debt-targets-growth