Iraq Economic News and Points To Ponder Wednesday Morning 8-27-25

Iraq Maintains Its Credit Rating
 
August 26, 2025   Baghdad / Iraq Observer Standard & Poor's announced on Tuesday that Iraq has maintained its credit rating at B-/B with a stable outlook.
 
The agency stated in a report, according to a statement from the Ministry of Finance, that  “Iraq’s rating remained at B-/B with a stable outlook,  a positive sign that reflects the strength of the national economy and the continued confidence of international institutions in the financial path and government reforms.”

 It pointed out that   “Iraq’s economic stability is supported by an annual improvement in oil revenues of approximately 1.9% during 2025-2028,  with the continuation of government measures to manage public debt and strengthen foreign reserves,which contributes to maintaining financial balance and supporting confidence in the national economy.” 

The agency noted that   "Iraq continues to meet its financial commitments on a regular basis,
with relative improvement in deficit indicators,in addition to a stable exchange rate and high levels of reserves at the Central Bank, which strengthens the country's external position."
 
In this context, Prime Minister Mohammed Shia al-Sudani directed the  "formation of a national team to improve Iraq's credit rating,  headed by the governor of the Central Bank and including members from ministries and economic institutions.
 
The team will develop an integrated strategy and coordinate with international rating agencies,
with the goal of   enhancing confidence in the economy, attracting investment, and   reducing reliance on oil."
 
It's worth noting that this rating reflects international institutions' confidence in the financial and economic policies implemented by the government.
 
It represents a step in support of efforts to attract investment and boost economic activity,
alongside continued efforts to     develop public financial management,     diversify revenues, and
ensure optimal use of resources to serve economic stability.  https://observeriraq.net/العراق-يحافظ-على-تصنيفه-الائتماني-2/    
  
 Al-Sudani's Advisor: Iraq's External Debt Is At Its Lowest Level In History, Not Exceeding 10% Of GDP.
 
Money and Business  Economy News – Baghdad  The Prime Minister's Advisor for Economic Affairs, Mazhar Mohammed Saleh,  revealed that external public debt in all its forms is at its lowest level in the history of public finance. Mazhar Mohammed Saleh said,
 
"The Iraqi economy is one of the most cash-generating economies with high financial flexibility to meet the liquidity requirements of the     economy in general, and the     liquidity of public finances in particular,      despite the rentier economic difficulties the country is facing    due to external geo-economic factors witnessed worldwide and the Middle East in recent months."
 

Regarding external public debt, Al-Sudani's advisor explained that   "in all its forms (sovereign and commercial), it is currently at its lowest level in the country's public finance history,  with the portion due to be repaid by 2028 not exceeding 5% of GDP, or approximately 9 billion." He pointed out that
 
"adding the long-term external debt to the debt due above,it does not exceed 10% of the GDP, and a
total of approximately $18 to $20 billion."
 
Regarding borrowing procedures, Mazhar Mohammed Saleh explained that "based on the strong fiscal space provided by fiscal policy for domestic borrowing and repayment,  public finances have resorted to borrowing from the domestic market to meet public spending needs when necessary."

 He added,   "The domestic debt stands at nearly 92.2 trillion dinars,  some of which has accumulated over previous years.
 
Today's domestic debt is borrowed from the local financial market to finance the government's financial leverage due to the drop in oil prices to below the rate stipulated in Federal General Budget Law No. 13 of 2023, the amended three-year budget."

He noted that  "about 47% of this domestic public debt is in the Central Bank's investment portfolio,
backed by high foreign reserves approaching $100 billion," adding that
 
"the total domestic and external debt as a percentage of GDP does not exceed 40%,
which is within the global safe range of 60% of GDP.
 
Therefore, Iraq's public debt as a whole falls within the criteria of international financial and economic stability."
 
Mazhar Mohammed Saleh warned of "expanding debts," and that  a disciplined policy must be adopted to maximize resources,     especially non-oil ones,  as part of the current government program.

He emphasized that   "Iraq is one of the countries keen to repay its foreign debts within the public spending allocations in the annual general budget.
 
Therefore, it has enjoyed a stable credit rating from the credit rating agency since the adoption of that sovereign rating in 2016 and up to the present time,  within the framework of     a periodic evaluation conducted every six months and     periodically by the international credit rating agencies    Fitch Global and      S&P for countries around the world."  
views 791     Added 08/23/2025 - 9:40 AM    https://economy-news.net/content.php?id=59118    

Economic Institution: Central Bank Reforms Boost Investor Confidence And Open The Way To Global
 
 Markets  Local   Khaled Al-Jaberi,  Chairman of the Osool Foundation for Economic and Sustainable Development,  affirmed on Tuesday that the  reforms led by the Central Bank   are fundamental and  have contributed to transforming the banking sector    from a restricted reality     to one open to the world.

He explained that  these steps will     open up broad horizons for Iraqi banks and     positively impact the overall economic and investment activity in the country. 

 Al-Jaberi said, "The current reforms have transformed the banking sector  from being restricted and deprived of dealing in dollars     to one capable of    opening correspondent banks and    reestablishing its international relations.

This will directly impact the   improvement of banking services and the   revitalization of economic activity   in Iraqi markets." 

He added,  "Iraqi banks welcomed these reforms because they are an indispensable necessity.
 
The banking sector is suffering from numerous problems, and a comprehensive reform is needed to ensure the  ability to conduct international transactions and ensure the freedom to trade in dollars." 

He explained that  "the investment environment in Iraq has become attractive thanks to the security stability, and this has prompted investors to enter the Iraqi market." He explained that "investors are always looking for two basic answers: the   status of the banking sector and the   country's tax system.
 
If reassurance is achieved in these two aspects,     investments begin to flow."  Al-Jaberi pointed out that  "banking reforms will lead to broader relationships with correspondent banks,
putting Iraq on the path to     opening up to the global market and     facilitating the transfer of funds in line with international standards."  He continued,
 
"Financial technology and digital transformation are a fundamental pillar of these reforms, as
they     not limited to banking policies alone, but rather  are encompass all aspects of banking operations.
 
This positively impacts all economic sectors, such as  agriculture,   industry, and     tourism,and contributes to     facilitating the movement of funds and     trade both domestically and internationally."
 
Earlier, Central Bank Governor Ali Al-Alaq confirmed that the banking reform plan would
     boost international confidence and        restore relations with correspondent banks. 
views 56     Added 08/26/2025 - 5:41 PM    https://economy-news.net/content.php?id=59278  

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