Iraq Economic News and Points To Ponder Tuesday Morning 12-30-25
An Economic Expert Identifies 5 Pillars For Strengthening Iraq's Economic Power.
Time: 2025/12/19 Readings: 135 times {Economic: Al-Furat News} On Friday, economist Salah Nouri identified five key pillars for strengthening Iraq's economic power, stressing that the success of economic programs and the path to international development is linked to combating corruption in contracts and implementation.
Nouri told Al-Furat News Agency that "economic strength lies in local production that competes with imported goods, especially agricultural and animal production," noting that "the Iraqi environment is historically an agricultural country and the elements of agricultural production can be provided, provided that the water problem is solved at the present time."
He added that "the second pillar depends on enhancing industrial production through public-private partnership contracts, as well as encouraging small and medium enterprises by supporting them with soft loans while ensuring the monitoring and regulation of these projects."
Nouri stressed "the importance of accelerating the completion of the electrical power infrastructure and utilizing the natural gas associated with oil extraction," while also calling for "reconsidering the size of the operational budget and streamlining spending, especially unjustified privileges in light of the financial crisis."
The economist stressed that "the success of these programs, in addition to the International Development Road project, depends primarily on combating corruption in contracting and implementation processes."
From... Ragheed https://alforatnews.iq/news/خبير-اقتصادي-يحدد-5-ركائز-لتعزيز-القوة-الاقتصادية-في-العراق
2026...Expectations And Surprises
Yasser Al-Mutawalli In just a few days, the clock will tick away, announcing the end of one year and the beginning of a new one. The year 2026 is just around the corner.
Experts' predictions are often based on indicators and signs of economic phenomena and the changes that occur to them. These predictions are often correct and accurate, and sometimes they intersect with unforeseen surprises.
According to the indicators shown to us, and within the economic framework that constitutes the specialization of this page and my professional interest, the general picture points to a future that promises a real breakthrough in achieving an important aspect of economic reform.
The current government has taken steps and made beginnings with a clear imprint, characterized by particular importance in launching a major development program that will restore the Iraqi economy to its former glory, strength, and status.
In the service sector, any observer can witness the realization of a number of service projects on the ground, without the trouble of evaluation or controversy, forming the nucleus of a primary infrastructure that we desperately need, in support of upcoming strategic projects, such as bridges and overpasses, paving of main and secondary streets, and others.
As for diversifying the economy and sources of funding, actual steps have begun, even if some of them are limited to initialing agreements with major international companies investing in the implementation of strategic projects, most notably the Development Road project, in addition to other promising projects.
Within the sub-sectors of economic reform, the banking sector is witnessing today a tireless effort to correct the course of banks, enabling them to provide the requirements of development, including meeting the needs of investment companies for advanced financial services.
In terms of international, regional and Arab economic relations, Iraq has opened up to extensive exchange and cooperation deals, reflecting the improvement in its economic position and its increasing involvement in its regional and international environment.
The above is but one aspect of many that cannot be fully addressed in this article. However, this achievement provides a solid foundation upon which the next government can build to continue the journey, adopt the important projects whose foundations have been laid, and ultimately achieve the desired economic reform and sustainable development.
I must also mention a crucial indicator upon which we can build a better future: human capital, the cornerstone of development and progress. Alongside this, the health sector has witnessed a significant victory, marked by the successful implementation of the health insurance program for the first time in our country, although we still need more hospitals and advanced medical services.
As for the surprises that may be imposed by international events and changes, they are naturally beyond our control, but the duty remains to deal with them in accordance with the interest of the country and its people.
Beyond that, it is the responsibility of the new and anticipated government to turn expectations into realities on the ground, so that the citizen may enjoy the bounty and wealth of his country. All we need is sound management of public funds, and the rest will happen automatically. https://alsabaah.iq/125679-.html
Experts: Liquidity Is Under Control, Reforms Are Necessary
Baghdad: Hussein Thagab and Imad Al-Imara Economic experts have downplayed concerns about financial risks threatening the reality of public spending in the country, stressing that what the state’s monthly liquidity is witnessing does not amount to a “financial gap” in the scientific and precise sense, but rather reflects mainly the effects of fluctuating crude oil prices in global markets, in addition to the limited non-oil resources.
They pointed out that the financial situation remains within manageable limits, but requires genuine structural reforms to prevent a recurrence of crises and enhance financial stability in the medium and long term. Experts believe that talk of a fiscal gap is often misunderstood, as a gap implies a persistent structural deficit between revenues and expenditures, whereas the current situation is linked to temporary fluctuations in monthly cash flows. These fluctuations stem from the nature of a rentier economy and its near-total dependence on oil, making public finances vulnerable to changes in global markets.
In this context, the Prime Minister's financial advisor, Dr. Mazhar Muhammad Salih, affirmed that the fluctuations in monthly liquidity cannot be classified as a genuine financial gap, but rather reflect temporary imbalances linked to the volatility of oil revenues and the weak contribution of non-oil revenues to financing the general budget.
In an interview with Al-Sabah newspaper, he explained that managing this situation requires a high degree of realism in financial decision-making and swift action, avoiding reactive or temporary solutions that could lead to deeper imbalances in the long run.
The Essence Of Financial Stability
Saleh pointed out that maintaining financial stability at this stage necessitates controlling and prioritizing operational spending to ensure it is directed towards the state's essential obligations, primarily salaries for employees and retirees, social safety nets, and critical service and security sectors. He emphasized that rationalizing or postponing some non-essential expenditures does not mean reducing the state's role, but rather aims to protect financial and social equilibrium and prevent financial pressures from spreading to broader segments of society.
He added that any financial solution must balance the requirements of monetary stability with the social dimension, warning that ill-considered decisions could create inflationary or social effects that would be difficult to contain later.
Maximizing Resources And Improving Tax Collection
The financial advisor emphasized that maximizing financial resources is a complementary approach to controlling spending. This can be achieved by improving the efficiency of tax collection and the collection of outstanding dues, along with developing tax administration and expanding the tax base without overburdening low-income earners. He explained that strengthening non-oil revenues has become a strategic necessity to reduce the vulnerability of public finances to oil price fluctuations.
He also indicated the possibility of resorting to domestic borrowing within carefully considered limits and using short-term instruments, provided that this does not lead to liquidity pressures or create inflationary waves. At the same time, he emphasized the importance of activating the investment of underutilized government assets and transforming them into productive resources, thereby contributing to supporting public finances and achieving sustainable revenues in the medium term.
Diagnosing The Structural Problem
For his part, financial expert Alaa al-Fahd explained that Iraq's financial problem has been identified for years and stems from the rentier nature of its economy and its excessive reliance on oil revenues, making the country highly vulnerable to any rise or fall in crude oil prices on global markets. He emphasized that this structural problem requires reforms that go beyond temporary or patchwork solutions.
Al-Fahd told Al-Sabah: “The current stage calls for adopting urgent and immediate reforms to deal with the current challenges, in addition to future strategic reforms aimed at diversifying the revenue basket and reducing dependence on oil, as well as reducing government spending as much as possible without affecting social or productive investment spending.”
Strategic Projects
As A Safety Valve
Al-Fahad pointed out that the major projects adopted by the government, including the Grand Faw Port and the Development Road project, as well as the revitalization of the agricultural and industrial sectors, represent a crucial pillar for mitigating the impact of any potential financial crisis. He explained that these projects not only provide direct revenues but also contribute to addressing chronic economic bottlenecks, creating job opportunities, and stimulating local production chains that enhance the added value of the national economy.
He added that investing in agriculture and industry represents a strategic option to transform the economy from a rentier, consumer-based economy to a productive one, thus ensuring more stable and less volatile sources of income.
Permanent Sources Of Revenue
The financial expert stressed that the current financial situation does not pose a direct threat to the country’s stability, but that the continuation of the situation as it is without radical treatment may lead to unacceptable confusion, in light of the one-sided economy, weak government coordination, and the disruption of many sectors that are supposed to be key drivers of growth and permanent sources of revenue.
He pointed out that the next government bears a double responsibility in finding real solutions to the problems of the economy, by adopting clear policies to move towards diversifying financial revenues, while avoiding resorting to unstudied internal or external debt, due to the future burdens it places on public finances.
Digital Transformation As A Reform Tool
Al-Fahad pointed out that automating taxes and customs, and transitioning to electronic collection systems, are pivotal reform tools for the next phase, given their role in increasing revenues, reducing waste and corruption, and improving financial transparency. He emphasized that these measures, along with activating productive sectors, can contribute to achieving sustainable financial and economic prosperity.
He concluded by emphasizing that the current financial situation is still under control, but managing the next phase requires courageous decisions and gradual and well-thought-out reforms, stressing that the search for real solutions is no longer an option, but an inevitable necessity to ensure economic and social stability in the country. https://alsabaah.iq/125458-.html
Experts: Iraq Achieves Financial Balance That Boosts Global Market Confidence
Economic Baghdad: Hussein Thagab and Imad Al-Imara Economic experts and specialists have downplayed the risks of Iraq’s internal and external public debt, stressing that its ratio is still within the safe international standard range, and that the strength of the foreign currency reserves has contributed to the stability of Iraq’s financial situation.
The opinions of experts and specialists in economic affairs were consistent with the assurances of the Prime Minister’s financial advisor, Dr. Mazhar Muhammad Saleh, who indicated that “only $3 billion of the remaining debts to the Paris Club will be settled by 2028, and that 47% of the internal debt remains within the investment portfolio of the Central Bank of Iraq, and is covered as cash liquidity or cash liabilities at a rate exceeding 100% in foreign currency thanks to the strength of Iraq’s foreign reserves.”
Debt Repayment Mechanism
Saleh told Al-Sabah: “There is an amount of less than $6 billion of external debt being withdrawn and spent on projects in the liberated areas, from loans provided by international development funds, all of which will also be paid in the current decade, in addition to an external debt of about $9 billion that will be paid gradually in the next decade.”
He explained that the federal general budget sets a precise mechanism for settling external debts and their due dates on an annual level with a high degree of regularity, which has made Iraq’s credit rating more stable at the B level during the last ten years.
He added that the external public debt does not exceed, in all circumstances, between 7 and 8% of the gross domestic product, which is within the safe international standard range that allows the public debt to the output to be 60%, noting that the fluctuations in the price of oil, the main resource for the general budget, between 2014 and recently, and other external factors, led to government borrowing from the local banking market, which led to an increase in the internal public debt to about 92 trillion Iraqi dinars.
Investment Portfolio
The government advisor explained that 47% of the internal debt remains within the investment portfolio of the Central Bank of Iraq, and it is covered as cash liquidity or cash liabilities at a rate of more than 100% in foreign currency thanks to the strength of Iraq’s foreign reserves. He stressed that the total internal and external public debt as a percentage of GDP remains within the safe international standard range and does not exceed 35% to 40% of the country’s GDP under any circumstances.
Saleh emphasized the positive role played by monetary policy in what is called “monetary adjustment”, by facilitating the acceptance of bonds, bills or treasury bills under which public finances borrowed through market operations and absorbing them within the investment portfolio of the Central Bank of Iraq at a rate of approximately 47%, which greatly increased the liquidity of the economy.
And The Expansion Of The Monetary Base.
Real Assets
Saleh pointed out that the public finances authority, sooner or later, must begin accepting a strict and joint reform program between it as the financial authority and in conjunction with the monetary authority to gradually extinguish the internal public debt by linking that debt and exchanging it for real, productive government assets, or those capable of becoming productive, that generate high-value chains that help diversify the national economy, extinguish the debt at the same time, and support sustainable development.
Saleh called for the adoption of an economic model for swapping public debt for real government assets, by undertaking the Equity Acquisition process and the productive operation of distressed real government assets and converting them into joint-stock companies in a major partnership model between the state and the private sector, explaining that in this way the public debt can be gradually exchanged for those shares tradable in the capital markets, and the negative financial shocks that generated and accumulated that debt can be transformed.
Towards A Productive Force.
Enhancing Production Capabilities
In the same context, Alaa Fahd, a member of the media team at the Central Bank of Iraq, stated that the issue of debt is not an exceptional case specific to Iraq alone, as even major countries like the United States have internal and external debts, and it is often considered the most frequently used financial tool.
In Economic Growth.
Fahd explained to Al-Sabah that borrowing is not a problem in itself when it is directed towards investment spending because it creates income and job opportunities and enhances production capabilities. He pointed out that the internal debt, which currently amounts to about 91 trillion dinars, can be dealt with in a considerable part because it is owed to government banks owned by the state, which makes it less dangerous. However, the continued reliance on borrowing is a warning bell that calls for serious treatment.
He stressed that the solution lies in diversifying non-oil revenues and not being satisfied with a single resource, in addition to enhancing electronic collection of taxes and customs, and opening the way for investments and partnerships with the private sector to reduce pressure on public finances, calling for the revitalization of stalled sectors such as agriculture, industry, transportation and communications, and negotiating with OPEC Plus to increase Iraq’s oil quota in line with its production capacity. https://alsabaah.iq/124145-.html
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