Iraq Economic News and Points To Ponder Tuesday Evening 7-28-26
Will They Remove Three Zeroes From The Dinar
The Iraqi federal government is considering two additional measures to address its financial crisis: borrowing domestically and internationally and removing three zeros from the Iraqi dinar, a currency redenomination intended to simplify transactions, strengthen confidence in the dinar, and help manage inflationary pressures caused by increased money printing.
By: Hawre Tofiq
It is clear that, due to the war, the Strait of Hormuz has been closed, significantly restricting oil exports and causing a sharp decline in public revenues. As a result, the federal government is facing a crisis in financing its operational budget, particularly the payment of public sector salaries. To address this situation, it has taken the following steps:
1. Printing More Iraqi Dinars
During Prime Minister Mohammed Shia' Al-Sudani's government, additional Iraqi dinars have been printed to pay salaries. While this measure has helped solve the immediate problem of salary payments, it could lead to long-term inflation because of the increased money supply.
2. Two Additional Plans Under Consideration
The government is now considering two further options:
First: Domestic and foreign borrowing.
Second: Removing three zeros from the Iraqi dinar.
The Iraqi government is reportedly considering deleting three zeros from the national currency. For example:
25,000 Iraqi dinars would become 25 dinars after removing three zeros.
Likewise, all other currency denominations would be adjusted accordingly.
Instead of expressing figures in billions, they would be expressed in millions.
The objective of this move is to preserve the value of the Iraqi dinar. Since a large amount of currency has already been printed, the government fears inflationary pressure. It also intends to revalue the exchange rate against the U.S. dollar.
For example, after removing the three zeros, US$100 could be exchanged for 150 Iraqi dinars instead of the current denomination. The government also believes this measure could help reduce the apparent size of operational budget expenditures, including salaries.
3. Legal and Constitutional Requirements
Monetary and financial policy requires legal backing. The proposal to remove three zeros from the Iraqi dinar would normally require legislation, making it a politically sensitive issue that may be difficult to pass in Parliament.
To address this, the government has explored another legal route. The Prime Minister requested that the Federal Supreme Court of Iraq issue an interpretive ruling regarding the powers of the Council of Ministers under Article 80, Paragraph Third of the Iraqi Constitution, which authorizes the Council to issue decisions, regulations, and instructions.
The Prime Minister asked whether the Council of Ministers could issue regulations and instructions even if Parliament had not explicitly delegated that authority in a specific law.
The Federal Supreme Court ruled that, regardless of whether a law expressly grants such authority, the Council of Ministers possesses an inherent constitutional power to issue regulations, instructions, and decisions.
This ruling opens the door for the government to proceed with removing the three zeros from the Iraqi dinar through a governmental regulation, without first obtaining parliamentary approval. That this is a highly technical monetary and financial issue that deserves careful analysis and discussion by financial and economic experts.
From A Rentier Economy To Production: The Government Sets Goals For The Next Decade
Baghdad Today - Baghdad The Prime Minister’s financial advisor, Mazhar Muhammad Salih, announced on Monday (July 27, 2026) that the government has developed a plan to raise non-oil revenues to 46% within ten years, noting that the government is proceeding to enhance the private sector’s contribution to 54% of the GDP.
Saleh said in a press statement followed by “Baghdad Today”, that “the government’s fiscal policy during the next ten years aims to achieve economic stability and sustainable development, through diversifying revenue sources and strengthening the role of the private sector in the national economy”, noting that “the fiscal policy has a pivotal planning path, whose priorities are to achieve the two goals of economic stability and sustainable development, and the government will continue to implement its tools and procedures through the federal general budget, by restructuring public expenditures and revenues, in a way that contributes to restructuring the real economy at the macro level.”
He added that "the financial path aims to achieve two main goals during the next ten years, the first of which is to diversify non-oil revenue sources to reach about 46% of total public revenues, compared to no more than 10% or less at the present time, while the second goal is to raise the contribution of the private sector to the gross domestic product from about 37% to 54% during the next decade."
Saleh explained that "the financial plan stems from the conviction that diversifying public revenues and reducing the burdens imposed by a single-sector rentier economy go hand in hand with increasing the contribution of the private sector to the gross domestic product, because expanding the contribution of the private sector enhances the diversification of the national economy and increases opportunities for investment, production and employment."
He pointed out that "the principles and mechanisms of financial planning for the future of Iraq are based on gradually enhancing the added value produced by the private sector, which supports diversifying the structure of the gross domestic product and enhances the sustainability of economic growth."
Saleh explained that “revitalizing the productive sectors, expanding the investment base, and implementing strategic projects with a direct impact on local development are key pillars for creating sustainable job opportunities and reducing unemployment rates to single digits, reaching about 3% of the total workforce, instead of its current level of 13%.”
He stressed that "the economic philosophy upon which the process of sustainable development and achieving stability in Iraq is based is based on an effective partnership between the state and the market, which ensures the integration of the public and private roles in building a diversified economy that is more capable of facing future challenges."
https://baghdadtoday.news/303984-.html
Mid-August Is The Deadline... The Formation Of The Government Enters Its Final Stage.
Baghdad Today - Baghdad The issue of completing the cabinet has entered a new phase of political activity, following indications of a convergence of positions among the blocs regarding the vacant portfolios, at a time when attention is turning to the House of Representatives to resolve this long-awaited entitlement, amid expectations that the nominated names will be put to a vote during the middle of next August.
MP Ali Nahir said in a press statement followed by “Baghdad Today”, that “the completion of the ministerial cabinet will be in the middle of next month, especially after the understandings that took place between the political blocs regarding ministerial entitlements”, indicating that “its completion also means the completion of citizens’ rights.”
For his part, MP Jawad Rahim Al-Saadi said that “the completion of the cabinet was supposed to have taken place before the Prime Minister’s visit to the United States, but its resolution was postponed pending the arrival of the candidates’ names,” noting that “the number of remaining ministerial portfolios is nine.”
For his part, Walaa al-Jizani, deputy head of the Badr parliamentary bloc, confirmed that “the deliberations between the political blocs are still ongoing based on entitlements,” expecting to proceed with the vote on the remaining ministerial cabinet “in the middle of next August.”
This statement comes amid ongoing negotiations between political forces to complete the formation of the new government, after a number of ministerial portfolios were decided and other positions, including deputy prime ministers and some service ministries, remain subject to negotiation between blocs according to the principle of electoral entitlement and political balances, amid anticipation of the announcement of the final formula of the government cabinet in the coming days.
https://baghdadtoday.news/303974-.html
The Head Of The Integrity Commission Affirms The Continued Pursuit Of Corrupt Individuals Without Pause.
Information/Baghdad... The head of the Federal Integrity Commission, Mohammed Ali Al-Lami, affirmed on Tuesday that Iraq is moving steadily towards establishing a safe and stimulating environment for development and investment, thanks to concerted national efforts to combat corruption and dry up its sources, stressing that Iraq's battle against corruption is ongoing and knows no borders.
Al-Lami said in a speech in Turkey, which was followed by Al-Maalomah, that “Iraq is moving forward with steady steps in establishing a safe and stimulating environment for development and investment, thanks to the concerted national efforts to combat corruption and dry up its sources,” stressing that “completing these efforts requires effective international cooperation to track down and recover smuggled Iraqi funds.”
Al-Lami explained that “Iraq looks forward to strengthening cooperation with friendly countries, especially the Republic of Turkey, in the field of pursuing funds and proceeds obtained from corruption crimes, and exchanging information and expertise, in a way that contributes to recovering smuggled funds and returning them to the public treasure to be used in infrastructure, services and development projects.”
He pointed out that “Iraq’s success in combating corruption internally should be accompanied by a genuine international partnership based on legal and diplomatic cooperation, in accordance with relevant international agreements, foremost among them the United Nations Convention against Corruption,” stressing that “Iraq’s battle against corruption is ongoing and will not be stopped by borders,” and affirming that “whoever believes that he has found a safe haven outside the country after smuggling Iraqi money is living in a delusion.”
He added that “the competent Iraqi authorities are determined to pursue all legal and international diplomatic means to prosecute the accused and convicted and recover public funds,” explaining that “the money of the Iraqi people funds is a trust that cannot be compromised, and that the commission continues to work in coordination with international partners to prevent the provision of any safe havens for the corrupt, until all smuggled funds are returned to their rightful place in the public treasure.”
He noted that "the agenda and activities of the Prime Minister's official visit to the Republic of Turkey will include discussions on ways to enhance bilateral cooperation between the two countries, particularly in the areas of economy, water, security, and investment.
The visit will also address files and issues of common interest, mechanisms for implementing bilateral agreements and memoranda of understanding, and the follow-up and development of joint infrastructure projects, all in a manner that serves the interests of the two neighboring countries." (End of report 25)