Iraq Economic News and Points To Ponder Thursday Afternoon 6-4-26
Financial expert identifies tools to "save Baghdad" from the liquidity crisis - Urgent
Baghdad Today - Special Report Iraq's public finances are under increasing pressure due to declining oil revenues and the continued near-total reliance on crude oil as the primary source of budget funding. This has impacted liquidity levels and the government's ability to meet its growing obligations. Amid these challenges, economic calls are mounting for a review of the public revenue structure, expanding the tax base from non-oil sectors, reforming financial collection systems, combating corruption, and reducing waste in government spending.
These measures aim to enhance financial stability and mitigate the severity of recurring crises. Financial expert Saleh Rashid outlined several tools Baghdad could adopt to successfully manage the liquidity crisis, given the alarming decline in the country's treasury revenues for the third consecutive month.
Rashid told Baghdad Today that “Baghdad is facing a major, sensitive and complex financial crisis, especially after losing an important part of its crude oil export revenues as a result of the disturbances in the Strait of Hormuz, which has made Iraq one of the most affected countries in the region, as it depends on oil for more than 90% of its resources.”
He explained that "the government has limited options for addressing the financial gap, foremost among them developing non-oil revenues, which has multiple dimensions, most notably the issue of collecting money from services provided to citizens, as this issue is witnessing high levels of corruption that require a comprehensive review."
He added that "the introduction of modern technologies in collecting money, especially in the electricity and water sectors, has become an urgent necessity, provided that the collection is fair and equitable, takes into account the conditions of the poor and the simple, and contributes to reducing losses, as well as developing the collection of the rest of the other services."
Rashid pointed out that “warnings against relying on oil as a primary resource for Iraq’s treasury were issued more than 30 years ago, while many oil-producing countries, especially in the Arabian Gulf, realized the danger of this approach and began to change it, but successive governments in Baghdad did not give this issue sufficient attention.”
He added that "the picture today is clearer than ever before, which necessitates changing the economic view of oil and moving to a diversified economy in which oil is a part but not the whole," stressing "the importance of controlling the pace of spending in state institutions and strengthening efforts to combat corruption."
He concluded by saying: "A large part of Iraq's wealth is being drained due to corruption, and addressing this issue is a fundamental step for any real financial or economic reform."
The Iraqi economy is heavily dependent on crude oil export revenues, which constitute more than 90% of the country's resources, making it highly vulnerable to fluctuations in oil prices and geopolitical conditions in the region.
In recent years, warnings about the dangers of this unilateral reliance have increased, especially with the recurrence of financial crises and delays in paying salaries and government obligations at certain times.
https://baghdadtoday.news/300574-.html
An Economist Says Increased Money Printing "Threatens Financial Stability."
Information / Special: Economic expert Dirgham Muhammad Ali confirmed on Monday that the reopening of the Strait of Hormuz does not mean Iraq's immediate return to previous export levels, noting that increasing the printing of currency to cover the financial deficit threatens the economy.
Ali told Al-Maalomah that "crude oil production has declined as a result of the decrease in reservoir pressure in some fields and the shutdown of a number of wells, which requires technical procedures and sufficient time to rehabilitate them and resume work at full capacity," indicating that "restoring previous export rates will not be achieved directly just by opening the strait."
On the financial front, Ali warned against “rushing to adopt the option of printing money to address economic pressures,” stressing that “this step needs careful study to assess its potential effects on the national economy.”
He explained that “increasing the money supply without a real economic backing or parallel growth in foreign reserves could put pressure on the value of the Iraqi dinar and exacerbate financial imbalances,” noting that “this option entails significant economic risks.”
Ali pointed out that "resorting to external borrowing is not an easy solution, due to the legal restrictions that regulate borrowing operations and impose specific ceilings on it, as well as the limited availability of financing alternatives at the present time."
He added that "non-oil revenues are still of limited impact," explaining that "customs revenues have been affected by the decrease in the volume of imports during the recent period as a result of the implementation of the ASYCUDA system, which has been reflected in the volume of resources collected from customs and Levies."
He explained that "the continued repercussions of the Strait of Hormuz closure are placing additional pressure on the country's financial situation, given its heavy reliance on oil revenues and the absence of alternative export outlets capable of compensating for the losses, thus making the available economic options for addressing the crisis more complex." (End
Parliamentary Request To Hold An Emergency Session To Complete The Government Cabinet And Approve The Budget
6/3/2026 TRANSLATION: Republic of Iraq, Iraqi Parliament, Office of Attorney Ammer Nasrallah, Number: 315, Date: 3/6/2026, In the Name of God, the Most Gracious, the Most Merciful.
Republic of Iraq, Iraqi Parliament, Office of Attorney Ammer Rahim Nasrallah, Parliamentary Services Bloc. To the
Honorable Speaker of the Parliament: Convening an Emergency Session.
Greetings. Pursuant to Article (61) and Article 73 - Fourth) of the Constitution and the Parliament Law No.(13 of 2018 ), in response to the public interest and the requirements of the current stage, and given the importance of completing the requirements of the current stage and its direct repercussions on providing services to citizens and enhancing government performance, we kindly request that you take the necessary steps to convene an emergency session of the esteemed Parliament to complete the vote on the cabinet and finalize the vacant ministerial positions, thereby contributing to strengthening institutional stability and enabling the government to perform its duties optimally.
We also emphasize the importance of expediting the submission and discussion of the schedules for the 2026 Federal General Budget, given its significant impact on the implementation of service and development projects and meeting the needs of the people.
The provinces, as well as ensuring the continuation of reconstruction plans and improving the level of services
provided to citizens. These files represent a national priority that requires concerted efforts and expedited procedures to serve our beloved country and fulfill the aspirations of our noble people.
With our deepest gratitude and appreciation. A copy of this document is sent to: - The Office of the Speaker of the House of Representatives / For your kind review. - The Office of the First Deputy Speaker of the House of Representatives / For your kind review. - The Office of the Deputy Speaker of the House of Representatives /
For your kind review. Address: Najaf - Emad Sukkar Complex.
Representative Amer Rahim Nasrallah, Member of the Iraqi Parliament, 2/2026/6.
Al-Azirjawi Warns Of The Dangers Of Borrowing To Secure Salaries: It Exacerbates Iraq's Debt.
The Information Agency / Baghdad - MP Ali Al-Azirjawi warned on Tuesday against the government's continued reliance on borrowing to secure salaries and operational expenses, stressing that this approach exacerbates the debt burden and directly impacts the national economy.
Al-Azirjawi told the Information Agency that “Iraq is suffering from increasing debt that is casting a shadow over the overall economic situation,” explaining that “the continued reliance on loans reflects the absence of clear financial plans for managing resources.”
He added that "the continuation of the borrowing policy without real solutions will lead to a further deterioration in the national economy and increase the financial burdens on the state," emphasizing "the necessity of developing a reform vision to manage the financial file more efficiently and sustainably."
He affirmed that "addressing the financial crisis requires radical solutions, far removed from temporary solutions that rely on borrowing to cover operational expenses." End/25