Iraq Economic News and Points To Ponder Tuesday Morning 9-1-26
Cabinet to vote on Iraq’s 2027 budget in September
2026-08-31 Shafaq News- Baghdad Iraq’s cabinet will vote on the draft 2027 federal budget in September, with the projected deficit capped at 3%, government spokesperson Haider Al-Aboudi announced on Monday.
At a press conference, Al-Aboudi said the Finance Ministry is finalizing the bill in line with the Federal Financial Management Law. The program-based budget will include electricity initiatives and development projects in Saladin and Al-Diwaniyah provinces, as well as provisions concerning contract employees.
The previous government, led by Mohammed Shia Al-Sudani, enacted a three-year budget covering 2023–2025, but the final-year spending plan was not implemented after parliament failed to approve amended expenditure schedules before the law expired. The Finance Ministry instead relied on the one-twelfth (1/12) mechanism to cover salaries and mandatory spending.
Iraq also entered 2026 without a budget amid delays in forming a new government, the economic fallout from the regional war, and volatile energy markets, prolonging reliance on temporary spending arrangements.
Read more: 2026 budget: Iraq confronts unprecedented fiscal strain
https://www.shafaq.com/en/Iraq/Cabinet-to-vote-on-Iraq-s-2027-budget-in-September
The Government May Begin Issuing A New Currency Early Next Year
A video.. news report https://hathalyoum.net/articles/4222841
translation of video: Sources' decisions will settle the matter in the near future.
While the currency exchange may continue.
Sources said that the government may begin issuing a new Iraqi currency in early 2027 after removing three zeros from the dinar.
Indicating that the proposal is still under discussion within the Council of Ministers.
The sources expected a decision to be made in the near future.
While the currency exchange and the issuance of new banknotes may continue throughout 2027.
And it indicated that the project to remove the zeros aims to remove the stolen and stored money outside the banking system.
Confirming that the Central Bank of Iraq has not yet received an official government decision regarding the removal of zeros
AI summary:
The video reports on a proposal discussed by the Iraqi government regarding the potential issuance of a new currency at the beginning of the next year (0:00-0:03). This initiative involves deleting three zeros from the current Iraqi dinar (0:08).
Key points mentioned in the report:
Status of the proposal: The plan is currently under discussion within the Council of Ministers (0:12-0:15).
Timeline: The decision is expected to be finalized soon, and if approved, the process of replacing the currency and issuing new banknotes could continue throughout 2027 (0:15-0:25).
Purpose: The project aims to bring money that is currently looted or stored outside the banking system back into circulation (0:30-0:36).
Central Bank involvement: As of now, the Central Bank of Iraq has not received an official government decision regarding the removal of the zeros (0:36-0:43).
After Their Numbers Dwindled By More Than A Million People, Catholic Weekly Reports That Al-Zaidi Wants To Bring Christians Back To Iraq And Is Placing Land And Investment At The Heart Of The Return Project
Baghdad - One News - 8/31/2026 The Australian Catholic Weekly highlighted a government initiative to return Christian families who had emigrated to Iraq, noting that Prime Minister Ali al-Zaidi had placed the return of Christians among the national and governmental priorities, offering incentives that included residential land and encouraging businessmen in exile to return and invest.
The newspaper reported that Al-Zaidi confirmed, during his meeting with the Chaldean Patriarch Paul III Nona in Baghdad, the government’s readiness to provide the necessary facilities and support for the return of Christian families who left the country during the past decades, and to ensure that returnees are included in the project to distribute one million residential plots of land.
According to the report, Al-Zaydi stressed that Christians represent an active component and an essential part of Iraqi society and a key partner in building the state and shaping Iraq’s history and future, considering that the country’s strength lies in its national, religious and cultural diversity, and in the unity of its people and their social cohesion.
The report noted that the Prime Minister also called on Christian businessmen living abroad to return and invest in Iraq, as part of an effort to enhance the contribution of Christians to economic and service life, particularly in the health and education sectors.
The newspaper quoted the Chaldean Archbishop of Erbil, Bishop Bashar Warda, as saying that the church welcomed this invitation, noting that al-Zaidi expressed his confidence in the role that Christians can play in the education and health care sectors, and affirmed his government’s readiness to provide them with the necessary facilities and support.
According to the report, Christian denominations in Iraq run 18 schools, including prominent educational institutions, in addition to a Catholic university in Erbil.
Catholic Weekly noted that the number of Christians in Iraq has decreased from about 1.5 million in 2000 to less than 300,000 currently, according to estimates by the Aid to the Church in Need organization, after successive waves of emigration that worsened after the events of 2003, and the targeting of Christians by extremist groups, especially after ISIS invaded Mosul and the Nineveh Plain in 2014.
In contrast to the government's approach, the report noted the continued concerns within the church about the emigration of Christian youth, quoting Patriarch Nona's warning that a segment of young people are losing hope in their future in the country and that many of them want to emigrate, in addition to a noticeable decline in the number of marriages, warning of the repercussions of this on the future of the Christian presence and the role of youth in building Iraq.
Nona also considered corruption to be "Iraq's greatest enemy," linking the protection of human rights to combating financial corruption and reducing the influence of money and political power in the decision-making process.
https://1news-iq.net/بعدما-تقلّص-عددهم-بأكثر-من-مليون-شخص
Finance Ministry: Intensifying Efforts To Finalize The 2027 General Budget Project
Finance Minister Faleh Sari directed on Monday that the necessary technical requirements for preparing the draft general budget for 2027 be completed, stressing the need to intensify efforts during the next stage.
The Ministry of Finance stated in a statement that "the Minister inspected the departments of the Budget Department, reviewed the progress of work in preparing the draft program and performance budget, and met with the work teams tasked with preparing the project and listened to a presentation on the stages of completion and the remaining technical requirements."
Sari stressed "the importance of integrating efforts and continuing to work at an intensive pace, along with strengthening coordination and communication with ministries and government institutions to organize and audit financial data and provide the information required to prepare the draft budget accurately and efficiently."
He pointed out that "the shift towards program and performance budgeting requires continuous cooperation and coordination among the concerned parties, in order to ensure that the allocation of resources is linked to programs, objectives and results, and to achieve the most efficient use of public funds."
https://alssaa.com/post/show/59977-المالية-تكثيف-العمل-لاستكمال-مشروع-الموازنة-العامة-لعام-2027
Banking Sector Faces Turning Point In Iraq’s Reform Drive
2026-08-30 Shafaq News- Baghdad Iraq’s banking sector faces a “critical crossroads” after years of weak management, oversight failures and declining public confidence have limited its ability to attract savings and finance investment and development, the prime minister’s economic adviser told Shafaq News on Saturday.
Mudher Mohammed Saleh said building an efficient banking system could no longer be delayed, particularly in an economy heavily dependent on oil for foreign currency.
“Restoring confidence requires stronger governance, supervision and compliance, strict anti-money laundering and counter-terrorist financing standards, restructuring troubled banks, addressing weaknesses in their financial positions and raising capital in line with risk levels and modern banking requirements.”
Technology is another key part of the overhaul, Saleh said, calling for improved digital systems, cybersecurity and risk management, along with secure and reliable electronic payment services. Such measures would reduce reliance on cash, expand financial inclusion and bring more people into the formal banking system.
However, technology and oversight alone would not restore confidence. Banks also need greater transparency, stronger depositor protections, clear deposit safeguards, faster complaint handling and the ability to protect customers’ money, according to the advisor.
He called for banks to shift from traditional services and liquidity management toward financing the real economy, particularly small and medium-sized enterprises and productive agricultural, industrial and service sectors.
“A bank that does not finance productive economic activity remains a financial intermediary with limited impact,” he said, adding that institutions capable of mobilizing savings, managing risks and financing production and investment can become partners in development.
From Cash to Credit
International economics professor Nawar Al-Saadi told Shafaq News that banking reform had become essential for moving Iraq from a cash-based economy toward one driven by financing. He said the Central Bank of Iraq’s (CBI) program offers banks several paths, including remaining in business, merging or leaving the market, alongside tougher governance, compliance and risk-management requirements.
Rebuilding confidence requires sound governance, solvency and transparency rather than campaigns to attract deposits, Al-Saadi said. He called for resolving the status of banks unable to continue operating, strengthening the capital of viable institutions, improving disclosure and independent auditing, and holding boards and executives accountable for violations.
Depositors should find banks “safer and easier to use” than keeping cash, he added. This would also require greater lending to small and medium-sized businesses and productive sectors, as well as effective credit-scoring systems instead of excessive reliance on traditional collateral.
Protecting Deposits
Economic expert Ahmed Al-Janabi said reform required a comprehensive package beginning with restoring confidence and protecting depositors’ money, noting that many Iraqis remain reluctant to place their savings in banks.
He noted that the reform program involving global consultancy Oliver Wyman was developed against the backdrop of restrictions on several Iraqi banks. Seven institutions subsequently entered an initial phase allowing them to resume transactions and transfers in foreign currencies other than the dollar, while further reforms remain underway.
Al-Janabi estimated that currency issued by the CBI totals around 103 trillion dinars, while about 20 trillion dinars remain outside the banking system, much of it “hoarded in homes.”
Economic expert Ahmed Abdul Rabbo said the reforms undertaken with Oliver Wyman were important for rebuilding the banking sector, improving its efficiency and strengthening its links to the global financial system, calling for faster implementation.
He welcomed the decision allowing seven banks to conduct foreign transfers in currencies other than the dollar but said the priority should be enabling them to gradually resume broader operations. Reform should also extend beyond those institutions, he said, with other banks assessed and allowed to conduct foreign transfers once they meet the required standards.
The Central Bank has been working with international firms to overhaul the banking sector and address compliance problems that had cut several Iraqi banks off from dollar transactions.
On July 18, the CBI reached an agreement with the US Treasury Department allowing seven eligible banks to resume foreign correspondent banking in currencies other than the dollar. Access to dollar transactions remains subject to further compliance, governance and relicensing requirements.
https://shafaq.com/en/Economy/Banking-sector-faces-turning-point-in-Iraq-s-reform-drive