Iraq Economic News and Points To Ponder Wednesday Afternoon 5-27-26
Political Warnings About The Repercussions Of Dollar Fluctuations...And The Absence Of Economic Strategies Threatens The Livelihoods Of Vulnerable Groups
Information/Report.. Political and popular concerns are escalating in Iraq as the dollar exchange rate continues to fluctuate, amid criticism of the lack of comprehensive economic reform plans and the near-total reliance on oil revenues compared to weak support for productive sectors, which has negatively impacted the living conditions of citizens and disrupted local markets.
In this regard, former MP Mahma Khalil confirmed in a statement to Al-Maalomah News Agency that “previous and current governments have failed to build a coherent economic policy based on clear reform principles, which has directly impacted the monetary and living conditions of citizens.”
He added that “the almost complete reliance on oil revenues, in contrast to the weak support for productive sectors, investment and the private sector, has contributed to the continuation of economic crises and complicated government solutions.”
He pointed out that “any real economic reform must begin with combating corruption and activating financial and administrative oversight, in addition to adopting development plans capable of enhancing the value of the Iraqi dinar and achieving stability in local markets.”
He explained that “the current stage requires serious economic decisions that are far from temporary solutions, with the need to build a long-term strategy that addresses the imbalances that have accumulated over the past years.”
In this context, Imran Karkoush, a member of the State of Law Coalition, confirmed in a statement to Al-Maalomah News Agency that “the continued fluctuation in the price of the dollar directly affects the livelihood of citizens, especially the poor and middle classes who bear the greatest burden of rising prices.”
He added that “addressing the crisis requires integrated government measures that include strengthening financial stability, supporting local production, and tightening control over markets to reduce exploitation and unjustified price increases.”
He explained that “the stability of the exchange rate and the improvement of the economic situation would contribute to easing the pressure on the markets and achieving a balance in food prices within the country.”
It should be noted that saving the Iraqi dinar is no longer merely a monetary issue, but a crucial political and executive decision.
The success of any government efforts requires moving beyond temporary solutions and immediately protecting markets from price gouging, as well as revitalizing local factories and farms to reduce reliance on imports—the first line of defense for the livelihood of ordinary citizens. End/25s
Khalil: Successive Governments Have Failed To Achieve Genuine Economic Reform And End The Dollar Crisis.
Information/Exclusive.. Former MP Mahma Khalil asserted on Tuesday that successive governments have failed to implement genuine economic reforms capable of addressing the dollar exchange rate crisis and achieving financial stability in the country.
Khalil told Al-Maalomah News Agency that “previous and current governments have failed to build a coherent economic policy based on clear reform principles, which has directly impacted the monetary and living conditions of citizens.”
He added that “the almost complete reliance on oil revenues, in contrast to the weak support for productive sectors, investment and the private sector, has contributed to the continuation of economic crises and complicated government solutions.”
He pointed out that “any real economic reform must begin with combating corruption and activating financial and administrative oversight, in addition to adopting development plans capable of enhancing the value of the Iraqi dinar and achieving stability in local markets.”
He explained that “the current stage requires serious economic decisions that are far from temporary solutions, with the need to build a long-term strategy that addresses the imbalances that have accumulated over the past years.”
Furthermore, Imran Karkoush, a member of the State of Law Coalition, confirmed in a previous statement to Al-Maalomah News Agency that addressing the dollar crisis represents the most significant challenge of the coming period due to its direct impact on citizens' livelihoods. End/25
The Ministry Of Finance Continues Temporary Spending... Will The 2026 Budget Law Be Postponed To 2027?
Alsumaria News– Economy: As several months of this year have passed, it has been determined Oil CommitteeGas and natural resources in House of Representatives4 key features of this year's budget, as explained by the Prime Minister's financial advisor, Mazhar Muhammad Salih, that Ministry of FinanceCurrently, revenues and expenditures are being carefully managed within short-term deficit conditions, in accordance with the provisions Financial Management LawFederal Decree No. 6 of 2019, as amended, explained that the budget has now become a means of absorbing shocks, especially after what can be called the "Hormuz shock".
Saleh stated that "the current mechanism relies on a temporary disbursement rate of 1/12 of the actual current expenditures for the 2025 fiscal year." He explained that "this mechanism ensures the continued funding of essential operating expenses and covers the obligations of ongoing investment projects, as well as those that have been completed and are ready for operation."
He explained, "However, this framework does not allow for the creation of new expenditures or the launch of new investment projects until the 2026 federal budget law is enacted." Saleh added, "With the escalating geopolitical changes in the region..."Gulf What could be termed the "Hormuz shock" presents fiscal policy with a critical test.
The budget is no longer merely a tool for managing revenues and expenditures, but has transformed into a means of absorbing external shocks, achieving economic stability, and maintaining the development trajectory in a highly volatile regional and international environment.
He continued, "In these circumstances, the efficiency of public finance management, the flexibility to reallocate spending priorities, and the ability to safeguard monetary and economic stability become crucial factors for the Iraqi economy to transition to a more secure and sustainable phase."
Saleh indicated that "the proposed scenario is the possibility of legislating a budget for the remainder of 2026." He explained that "if a climate of peace prevails, the budget deficit will be significantly lower, as the resumption of exports of 85 percent of oil through the Strait of Hormuz will ensure real revenue inflows within the approved estimates."
He added, "However, if the conditions of the US-Iranian war and its repercussions on the ability to Iraq Regarding oil exports, any budget approved under these circumstances will have a larger deficit, as oil is the primary source of funding for public spending.
Saleh concluded, "Therefore, the second half of 2026 will directly reflect these circumstances in the size of the expected deficit and in the public spending ceilings that will be adopted for the fiscal year."
Meanwhile, four key features were identified.
Oil Committee Gas and natural resources in House of Representatives Four key features of this year's budget.
Committee member Hawraa Aziz said...Al-Mousawi This year's budget will likely be based on a lower (hedging) oil price for 2026, around $60 per barrel, along with spending cuts, increased non-oil revenues, and a reduction in total dependence on oil.
Discussions are underway regarding efforts to reduce the budget deficit given the expected decline in global oil prices, as any increase in the price of oil supplied to local refineries could gradually impact citizens.
For his part, Ali al-Azirjawi, a member of the State of Law Coalition, stated that there is no longer enough time to submit the 2026 budget, indicating the necessity of...Asylum" Towards preparing an emergency plan similar to the Food Security Law, to be agreed upon quickly, to ensure the continued functioning of the government and ministries in an organized and efficient manner."
He added that "adopting an emergency plan is a realistic option in light of the current challenges," noting "the importance of expediting its vote within cabinet And then approve it so that it can assume its executive role as quickly as possible.”
Al-Azirjawi explained that “Iraq faces a number of economic challenges, most notably the size of its internal and external debt, which requires serious solutions, in addition to security challenges and regional tensions that further complicate the overall situation.
” In a proactive move, economic researcher Bassam Raad said that “the proposal put forward by the Oil and Gas Committee to adopt a hedging oil price of $60 per barrel represents a proactive step that appears aimed at controlling public spending and avoiding further internal debt.”
Raad added that “a careful reading of the figures and international economic warnings, especially the warnings of… ”International Monetary Fund This reveals inevitable challenges that could render this figure merely a temporary fix.
He explained that "adopting a price of $60 per barrel with an export volume of 3 million barrels per day would generate oil revenues equivalent to approximately 85 trillion Iraqi dinars, while the actual need to cover operational and investment expenses, even after reductions, is no less than 100 trillion dinars, meaning the deficit will persist even with adherence to a conservative price."
Raad clarified that "oil remains hostage to geopolitical tensions due to the disruption of export routes through Strait of Hormuz Oil exports plummeted by 90 percent last April, meaning this year will be a vicious cycle in which public finances struggle to secure salaries and avoid accumulating debt. The economist added that postponing the budget further contributed to this situation.
Nabil Al-Marsoumi The postponement of the 2026 budget to 2027 was attributed to several reasons, most notably the limited time available, as the country is now halfway through 2026.
Additionally, the volatility of oil prices and fluctuating export volumes, particularly after the Strait of Hormuz crisis, makes estimating oil revenues for this year more difficult.
Al-Marsoumi warned that the absence of a budget means the government lacks the legal authority to borrow domestically and internationally.
He explained that if the 2026 budget is not approved, the government must seek legislation authorizing it to borrow to cover the deficit, as occurred in 2022 when Parliament passed laws allowing the government to borrow domestically and internationally. Any borrowing without legal authorization is considered a violation.
Prime Minister's Advisor: Iraq Is On The Verge Of Major Economic Changes Under The Guidance Of Al-Zaidi
Baghdad Today - Baghdad: The Prime Minister's Advisor for Financial Affairs, Mazhar Muhammad Saleh, confirmed on Wednesday (May 27, 2026) that Iraq is going through an important transitional phase at the economic level, noting that the directives of Prime Minister Ali al-Zaidi have brought about a shift in the philosophy of managing the state's financial and economic affairs, which paves the way for broad transformations during the coming period.
Saleh said in a statement followed by “Baghdad Today” that “Al-Zidi assigned the Minister of Finance the duties of Deputy Chairman of the Ministerial Council for the Economy, which is a measure that reflects the philosophy of the modern state that sees the Ministry of Finance as a sovereign institution concerned with planning the economic future, and not just an entity for distributing salaries.”
He pointed out that "Iraq is about to undergo broad changes in its economic structure," noting that "the Prime Minister has asked the Ministry of Finance to prepare a long-term plan and move from the role of treasurer to a ministry that leads the reform of the philosophy of the economic system and creates a balanced partnership between the state and the market, within the framework of Iraq Vision 2035."
Saleh explained that "the Ministerial Council for the Economy has become the main engine for economic policies, and that it will lead the next phase by transforming temporary solutions into sustainable institutional work aimed at reforming the structure of the national economy."
He also explained that "implementation includes comprehensive oversight extending from the Financial Control Bureau to ministries such as industry and agriculture, reaching the oversight of financial markets," stressing that "the citizen is the primary goal of development programs and improving the standard of living."
In the same context, Saleh stressed that “the Central Bank of Iraq is independent in its work, but it coordinates within the Ministerial Council for the Economy, which is headed by the Ministry of Finance,” explaining that “there is a Council for Economic, Monetary and Financial Stability in which all essential economic files are presented.”