Iraq Economic News and Points To Ponder Thursday Evening 8-6-26
Iraq Is Facing A Liquidity Crisis... Will The Government Resort To Printing Money To Secure Salaries?
August 6, 2026Last updated: August 6, 2026 The Independent - Iraqi finances are facing increasing pressure as oil revenues continue to decline, at a time when the government needs about 8 trillion dinars per month to cover the salaries of employees and retirees and social welfare benefits, in addition to other government obligations and expenditures, which has brought the issue of liquidity back to the forefront of economic discussion.
According to a report published by Al-Araby Al-Jadeed newspaper and followed up by Al-Mustaqila, the limited financial options available have prompted the proposal to print currency to return again as one of the scenarios proposed to provide liquidity, amid economic warnings that this option may have serious repercussions on inflation, the exchange rate of the dinar, and the purchasing power of citizens.
These developments come at a time when the Central Bank of Iraq is seeking to maintain monetary stability and manage liquidity levels, as it has previously warned against using the issuance of new money to finance public expenditures, stressing that financing the deficit through this route could lead to increased inflation and a decline in the value of the currency.
Economic experts believe that Iraq faces a large funding gap as a result of declining oil revenues, since the general budget depends mainly on oil exports, which means that any decrease in prices or exported quantities directly affects the state’s ability to finance its obligations.
Financial and banking expert Mahmoud Dagher said that the decline in oil revenues has created a gap between available resources and the size of monthly spending, noting that Iraq needs billions of dollars monthly to cover salaries, while revenues have fallen to levels that are not sufficient to meet obligations.
Dagher warned that resorting to increased monetary issuance or a large expansion of domestic debt could lead to additional pressures on the economy, including higher inflation, increased pressure on monetary reserves, and the potential impact on the dinar's exchange rate against the dollar.
He pointed out that the current crisis is not only related to the decline in oil prices or the decrease in exports, but also reveals structural challenges that have accumulated over the past years, including high operating spending, weak diversification of revenue sources, and the need for broader financial reforms.
For his part, economist Safwan Qusay stressed that managing liquidity during the next phase requires setting spending priorities, so that the government focuses on salaries, the social safety net and basic expenditures, while working to reduce unnecessary expenditures and increase non-oil revenues.
Qusay explained that among the possible solutions are improving the collection of taxes and fees, enhancing revenues at border crossings, recovering public funds, in addition to supporting other economic sectors to reduce dependence on oil as an almost sole source of budget financing.
He also pointed to the importance of restoring oil export levels and diversifying shipping routes, noting that any increase in exports will take time to be reflected in government revenues, which makes interim solutions necessary to manage the current crisis.
In the same context, Jamal Kojar, a member of the parliamentary finance committee, confirmed that the government faces limited options for providing liquidity in the coming months, explaining that recovering funds and maximizing revenues are part of the solution, but they may not provide large resources quickly.
He added that other options, such as increasing taxes or selling some state assets, could have economic and social repercussions, while printing money remains an option despite the risks that may accompany it.
Observers believe that the current liquidity crisis represents a real test for Iraqi fiscal policy, as protecting salaries on the one hand, and maintaining currency and price stability on the other, require solutions that go beyond temporary measures, towards a comprehensive reform that restructures spending and strengthens non-oil revenue sources.
Recent developments confirm that Iraq’s continued dependence on oil makes its economy vulnerable to repeated shocks, placing the government in a position where it must accelerate the building of a more diversified economy capable of withstanding financial crises. https://mustaqila.com/العراق-أمام-أزمة-سيولة-هل-تلجأ-الحكومة/
With Integrated Banking Solutions For Traders And Companies, The International Development Bank Expands Its Support For The Private Sector.
Economy | 05/08/2026 Mawazin News - Baghdad The International Development Bank (IDB) announced its continued support for the private sector by offering a comprehensive suite of banking solutions and services tailored to merchants, companies, and public and private sector employees. This aligns with its strategy to support business growth, enhance financial inclusion, and accelerate digital transformation in Iraq.
In a statement received by Mawazin News, the bank explained that its services include a merchant account offering solutions for managing payments and electronic collections in partnership with Al Arab Company, via point-of-sale (POS) terminals.
Benefits include waiving merchant commissions, a 3.5% monthly return on the average balance, no minimum balance requirement or account management fees, and an increased daily cash withdrawal limit for debit cards to 10 million Iraqi dinars.
The bank also provides companies and institutions with integrated banking solutions encompassing financing, letters of credit, letters of guarantee, cash and liquidity management, international trade services, treasury services, and financial consulting, thereby enhancing business efficiency and supporting commercial expansion.
As part of its efforts to support the business environment, the International Development Bank (IDB) provides payroll services, along with financing, savings, investment, and digital solutions for employees. This contributes to enhancing financial stability and improving the efficiency of banking services within institutions.
The bank's Managing Director, Saed Zureikat, affirmed that the bank continues to invest in developing innovative banking solutions that meet the needs of merchants, companies, and employees, contributing to the advancement of digital transformation, empowering the private sector, and building a more competitive and sustainable economy.
The bank noted that its services are based on a strong capital base and full compliance with the regulations of the Central Bank of Iraq. It emphasized its commitment to continuously developing its banking products to support the competitiveness of the private sector and enhance the investment climate in Iraq.
The bank reiterated its commitment to further developing its banking services and products to boost the competitiveness of the private sector, support the business environment, and attract investments, in line with its vision to be the preferred financial partner for individuals and businesses in Iraq. https://mawazin.net/Details.aspx?jimare=287865
Shortages And Low-Quality Fuel Drive Restrictions In Iraq’s Nineveh
2026-08-06 Shafaq News- Nineveh A gasoline shortage in Iraq’s Nineveh province has left motorists facing long queues at fuel stations, with growing complaints over fuel quality and supply availability as authorities move to tighten distribution controls and curb unauthorized trading.
Drivers across the province told Shafaq News that the problem has extended beyond waiting times, with many describing poor vehicle performance from the gasoline being supplied, including subsidized “improved” fuel. They attributed repeated vehicle problems and engine damage to the low octane levels found in some supplies.
An official at the State Oil Products Distribution Company disclosed that new measures will be introduced to regulate fuel distribution and prevent unauthorized trading.
The planned system would require vehicle owners to obtain gasoline through a fuel card system using existing paper cards, electronic cards, or mobile-linked QR codes. The measures would also verify vehicle ownership details before fuel is supplied.
Nineveh has long relied on a fuel card system, but oil authorities are now working to strengthen monitoring mechanisms. The Provincial Council is also seeking a higher daily fuel allocation for the city, while residents have called for imported gasoline to undergo technical testing before entering the market to ensure it meets required quality standards.
In Iraq’s Kurdistan Region (KRI), fuel prices have faced pressure in recent months. Commercial gasoline exceeded 1,300 dinars ($0.99) per liter before a July price cap was introduced. In Al-Sulaymaniyah, regular gasoline reached 1,000 dinars ($0.76) per liter in June, while improved and super grades were sold for 1,200 dinars ($0.92) and 1,350 dinars ($1.03), respectively.
KRI requires between 126,700 and 140,000 barrels of fuel per day but receives about 50,000 barrels from the federal government, according to Acting Natural Resources Minister Kamal Mohammed. More than 2.709 million vehicles are registered across the region, adding further pressure on subsidized fuel supplies.