Iraq Economic News and Points To Ponder Late Sunday Evening 8-23-26
Al-Abadi On The Anniversary Of The Founding Of Iraq: Sovereignty, Institutions, And Justice Are The Criteria Of A True State
Baghdad - One News - 8/23/2026 On the anniversary of the founding of the modern Iraqi state, Haider al-Abadi, head of the Victory Coalition, affirmed that building a state is not completed by the date of its declaration or by the passage of time since its establishment, but rather by its ability to protect its sovereignty, preserve its institutions, and achieve justice for its citizens.
He stressed that the desired Iraq is a state strong in its institutions, independent in its decisions, and balanced in its relations.
Al-Abadi said in a post on the “X” platform that the anniversary of the founding of the modern Iraqi state brings to mind the fact that Iraq “was never just borders drawn by geography,” but rather an ancient state that carried the legacy of civilizations that contributed to the making of history.
He added that building a state is not completed merely by recalling its founding date, but rather by its ability to protect its sovereignty, preserve its institutions, and achieve justice for its citizens, which makes the strength of the state linked to the effectiveness of its institutions and the independence of its decision.
Al-Abadi pointed out that the Iraq that should be worked for is “a strong state with its institutions, independent in its decisions, balanced in its relations, and confident in its people and its future.”
The head of the Victory Coalition concluded his statement by emphasizing the priority of Iraq and the state, saying: “Iraq comes first, and the state is above all.” https://1news-iq.net/العبادي-في-ذكرى-تأسيس-العراق-السيادة-و/
Iraq Loses Over $30 Billion In Reserves Amid Regional Tensions: Cbi
The remarks came during a meeting Nasser held with the parliament’s finance committee, where he said that Iraq’s dollar reserves had fallen from $109 billion to $77.5 billion.
ERBIL, Kurdistan Region of Iraq – Central Bank of Iraq (CBI) Governor Nizar Nasser on Sunday said that the country’s reserves have fallen by around $31.5 billion, as the Iraqi economy struggles amid regional tensions.
The remarks came during a meeting Nasser held with the parliament’s finance committee, where he said that Iraq’s dollar reserves had fallen from $109 billion to $77.5 billion.
He noted that the funds had mostly been used to pay civil servant salaries, a participant in the meeting told The New Region
Iraq has been facing a worsening financial crisis since the start of the US-Iran war, with the closure of the Strait of Hormuz massively cutting off Iraq’s main source of income: oil exports.
The continuation of the war has sparked fears that the current measures the Iraqi government has implemented to make up for the decreased income cannot be seen as viable long-term solutions and that Baghdad will face difficulties paying civil servant salaries over the next few months.
Nasser also touched on his monetary policy for the coming years, the preservation of financial stability, and cash management.
In mid-July, the Iraqi parliament’s finance committee said it has completed a draft for a domestic and foreign borrowing bill to curb the economic crisis.
In a televised interview in June, Iraqi Foreign Minister Fuad Hussein said that Baghdad has resorted to printing cash 25 percent more than its actual financial capacity amid a drop in revenues due to the Iran war, warning that a financial catastrophe awaits Iraq if the conflict continues until the end of the year.
The CBI has reportedly pumped around 43 trillion dinars (~$32.8 billion) into the market by printing more banknotes, reaching into its reserves, and recovering embezzled funds.
https://thenewregion.com/posts/6307
Iraq Sets $50–$60 Oil Price For 2027 Budget
At a Glance
• Oil benchmark is set below market prices
• Salaries and pensions remain protected
• The Strait of Hormuz risks are complicating budget planning
• A supplementary budget is possible if revenues rise
Iraq’s 2027 draft budget is being prepared with a conservative oil price benchmark as the government seeks to shield public finances from energy market volatility and regional geopolitical risks.
Key Statements and Focus Area
• Mazhar Muhammad Saleh, Financial Advisor to the Prime Minister: The price per barrel in the 2027 draft budget is expected to range between $50 and $60.
• Saleh on complications: tensions surrounding the Strait of Hormuz have complicated budget planning.
Saleh stated that the government has set the benchmark below current market prices as a precaution against potential declines in global oil prices.
The measure is intended to provide greater protection against energy market volatility and unexpected changes in Iraq’s oil revenues.
Public sector salaries, wages, allowances, and pensions have been designated as key priorities in the draft budget.
Social protection funds are also included among the government’s protected financial commitments.
The government has said it will not compromise on payments to wage earners and low-income groups under the 2027 budget.
About the risks of the Strait of Hormuz, Saleh said that the waterway is particularly important for Iraq because disruptions to maritime trade can directly affect the country’s ability to export crude oil and generate revenue.
Budget projections indicate that Iraq could resume exports of more than 3 million barrels per day once the Strait of Hormuz crisis is resolved.
The government is also preparing for the possibility of stronger-than-expected revenues during 2027.
If revenues increase substantially by the middle of the year, authorities will prepare a supplementary budget to finance additional expenditures.
Saleh described the 2027 budget as one of the most complex draft bills in Iraq’s history, citing the current regional conditions and associated economic risks.
FYI
Iraq relies on crude oil exports for roughly 90% of its total state revenue, making its entire economy and public sector payroll highly vulnerable to market fluctuations and transit bottlenecks.
According to the IMF and World Bank, Iraq's actual fiscal breakeven oil price, the selling price per barrel needed to balance the national budget without incurring a deficit, typically sits much higher, often between $80 and $90 per barrel.
Setting a low baseline price of $50–$60 per barrel in the budget is a standard risk-mitigation strategy to avoid structural spending shocks; however, if real-world prices or export volumes drop significantly below budget forecasts, Iraq historically relies on central bank reserves, domestic borrowing, or freezing public investment projects to plug the funding gap.
Iraq Finance Committee And CBI Discuss Crisis Resolution Strategies
Daban Mohammed
At a Glance
• Iraqi Parliamentary committee hosted CBI officials over the financial crisis.
• Discussions focused on optimizing deficit-financing strategies and engineering proactive economic crisis solutions.
• Agenda items included addressing public sector payroll delays, inflation metrics, and foreign exchange reserves.
The Iraqi Parliamentary Finance Committee hosted Central Bank officials on Sunday to discuss strengthening monetary policy, financing the budget deficit, and implementing reforms to resolve the financial crisis.
Key Statement and Focus Area
• Lawmaker Uday Awad Kadhim stressed “the importance of establishing advanced mechanisms to strengthen monetary policy, support financial and monetary stability, and work on maximizing revenues to help boost the country's financial economy.”
• The CBI Governor provided a detailed explanation regarding the bank’s direction in monetary policy for the upcoming fiscal years.
Uday Awad Kadhim chaired a meeting of the Finance Committee, during which the Governor of the Central Bank of Iraq, Nizar Nasser Hussein, the Deputy Governor, Shaimaa Abbas, and the senior staff were in attendance.
The high-level session focused on evaluating monetary frameworks, optimizing deficit-financing strategies, and engineering proactive fiscal solutions to navigate the ongoing economic crisis.
The committee reviewed inflation metrics, foreign exchange reserves, and the underlying factors causing public sector payroll delays.
The lawmakers evaluated the Central Bank’s revenue-generation strategy, foreign currency auction data, local exchange rates, and subsidized dollar distribution channels for travelers.
Additionally, the committee examined mechanisms for financing the budget deficit, including the possibility of lending to the government or discounting treasury bills to finance the deficit, along with its impact on the monetary system and the national economy.
The committee also examined deficit-financing options like government lending and treasury bill discounting to assess their impact on the national economy.
During the meeting, the CBI Governor detailed the bank’s monetary policy direction for upcoming fiscal years, outlining “mechanisms to maintain monetary stability, manage liquidity, and enhance the role of the policy interest rate, explaining the impact of monetary policy on economic activity and the importance of a gradual transition to support the real economy.”
Discussions examined banking sector development and structural economic reforms to bolster financial stability.
The panel further analyzed the Central Bank’s 2025 fiscal records to verify reserve sustainability and strengthen economic resilience.
FYI
Iraq is experiencing a severe fiscal crisis, shifting from a budget surplus to a 21.24 trillion IQD deficit in the first half of 2026.
This shortfall stems from regional disruptions in the Strait of Hormuz, which have bottlenecked southern crude oil exports. Consequently, falling revenues have caused lengthy public sector salary delays and widespread market stagnation.
While some officials are pushing for emergency measures like printing money, experts warn this could destabilize the country's current inflation rate.
Earlier, Lawmaker Dilan Ghafoor told Channel8 that the Iraqi Council of Representatives will conduct the reading of the Borrowing and Grants Bill of 2026, which defines the borrowing authorities of the Prime Minister and the Minister of Finance.
The Iraqi government is also reportedly seeking to pass a bill to delete zeros from the currency, aiming to restore liquidity to banks and activate the electronic system for financial transactions in the country.