Iraq Economic News and Points To Ponder Sunday Afternoon 10-18-26

CBI Launches Digital Damaged Note Swaps

2026-10-18 05:27Shafaq News- Baghdad  Iraqis can now apply online to replace damaged banknotes under a new Central Bank of Iraq (CBI) service designed to make the process faster and easier.  The system allows citizens to submit replacement requests through the Ur electronic platform by entering the required information and confirming their applications. The CBI will then process the requests through its relevant departments, according to a statement.

The service is part of the bank’s efforts to expand digital services, reduce paperwork, and save citizens the time and effort required to replace damaged currency, it added. https://shafaq.com/en/Economy/CBI-launches-digital-damaged-note-swaps

CBI Triples Housing Support Allocation

2026-10-18 07:56  Shafaq News- Baghdad  The Central Bank of Iraq (CBI) on Sunday increased its housing support allocation from one trillion to three trillion dinars (about $1.97B) to help meet demand from citizens seeking to purchase homes in residential complexes.

According to a CBI document, the decision follows an earlier directive issued on August 22, 2024, and retains the same terms and conditions.

The document cited the amended Central Bank of Iraq Law No. 56 of 2004 as the legal basis for the increase. It also requested that the relevant director-general visit the bank's headquarters to sign an addendum to the agreement and complete the necessary procedures. https://shafaq.com/en/Economy/CBI-triples-housing-support-allocation

Iraq's IMF Loan Request Raises Concerns Over Reform Costs

2026-10-18   Shafaq News- Baghdad   Iraq's request for a program with the International Monetary Fund (IMF) has renewed debate over the potential cost of economic reforms, with financial experts warning that new borrowing could bring changes to public spending, taxes, subsidies, and government employment.

The discussions come as Iraq faces mounting fiscal pressure and remains heavily dependent on oil revenues to finance its budget, raising questions about how any IMF-backed program would affect public finances and household expenses.

Read more: Iraqi dinar devaluation sparks backlash from blocs inside the cabinet

Potential Conditions

Financial expert Ali Dadoush told Shafaq News that IMF lending typically comes with conditions that could include reducing government spending and increasing non-oil revenues through higher taxes and fees for public services, such as property registration and vehicle-related charges.

Read more: Iraqi traders count losses after dinar devaluation

He said reforms could also involve reducing subsidies for energy and certain items provided through Iraq's food ration system.

Dadoush questioned whether Iraq had major investment projects that justified seeking external loans, arguing that borrowed funds should be directed toward projects capable of generating sufficient economic returns to cover interest payments and repay the principal.

He warned that borrowing without productive investment could place additional pressure on public finances rather than strengthen the economy.

Economic Reforms

Former Central Bank (CBI) official and financial expert Mahmoud Dagher offered a different perspective, arguing that IMF lending has evolved beyond traditional conditionality toward economic reform programs negotiated with borrowing countries.

Dagher told Shafaq News that such arrangements are designed around agreed macroeconomic policy objectives, with the IMF seeking to safeguard repayment while the borrowing country benefits from technical expertise and support for economic development.

The effectiveness of any Iraqi program would therefore depend on the reforms agreed upon, particularly measures to control spending, expand non-oil revenues, and protect vulnerable groups from the effects of fiscal adjustments.

Subsidies and Public-Sector Wages

Economist Nabil al-Marsoumi pointed to IMF Managing Director Kristalina Georgieva's announcement that Iraq had requested a program to help address its budget difficulties.

Al-Marsoumi said Iraq's domestic debt had exceeded 109 trillion dinars (about $71.7B), while CBI's foreign reserves had fallen to $75.6 billion.

He estimated Iraq's external debt requiring repayment at approximately $13 billion, excluding unresolved debts from the former regime, while placing the broader recorded external debt stock, including historical obligations, at about $54 billion.

According to al-Marsoumi, borrowing from the IMF could be less expensive than raising funds through financial markets, but any agreement might require reforms to public-sector wages, food subsidies, electricity bill collection, and non-oil revenue generation.

He also suggested that a financing arrangement could involve a formal government commitment to reforms covering budget preparation, debt management, exchange-rate policy, public spending, and employment.

Dinar Devaluation Debate

Economist Ziad al-Hashimi raised separate concerns over the government's decision to devalue the Iraqi dinar, arguing that seeking IMF financing could undermine an earlier justification for the exchange-rate adjustment.

Al-Hashimi said discussions with the IMF had begun and suggested that the Fund was likely to support Iraq's request.

He argued that the government had previously presented devaluation as a way to avoid more painful measures, including external borrowing.

Al-Hashimi warned that the financial and social costs of an IMF agreement might emerge gradually after financing begins, particularly if earlier IMF recommendations become binding commitments under a negotiated program.

The concerns follow Georgieva's announcement on Saturday that Iraq had requested an IMF program and that the Fund intended to provide financial and policy support.

No financing amount, lending terms, or final reform conditions have been announced.

https://shafaq.com/en/Economy/Iraq-s-IMF-loan-request-raises-concerns-over-reform-costs

Iraqi Housing Costs About 10 Years Of Family Income

2026-10-18   Shafaq News- Baghdad   A typical 90-square-meter apartment in Iraq costs about 10.1 years of family disposable income, ranking the country 70th of 108 in Numbeo's mid-2026 price-to-income index, where a higher ratio means less affordable housing.

That puts Iraq well below the world's least affordable markets, led by Nigeria at 116.3, Sri Lanka at 55.4 and Ghana at 49. Among Arab countries, ratios were highest in Egypt (18.3), Lebanon (16.9), Algeria (15), Morocco (13.6) and Tunisia (12.8), and lowest in the UAE (7.8), Jordan (6.7), Kuwait (6.1), Bahrain (5), Saudi Arabia (4.7), Qatar (4.5) and Oman (3.8). Neighboring Iran scored 16.

South Africa had the lowest ratio in the index at 3.1, followed by the United States at 3.4.

https://shafaq.com/en/Economy/Iraqi-housing-costs-about-10-years-of-family-income