The amount of internal debt held by the Iraqi government was disclosed by Mazhar Muhammad Salih, the prime minister’s financial advisor, along with the reasons behind its buildup.
“Iraq and during the previous years extending between 2014 and 2021, its economy was exposed to two major shocks,” Saleh stated in an interview with the. He went on to say that “the first shock was financial and security, as a result of the country’s exposure to the threat of ISIS terrorist gangs, in addition to the war that “Iraq won over terrorism.”
The decline in oil prices and the Corona pandemic, he continued, “were the causes of the second shock, which was financial health. In both shocks, the loss of a barrel of oil represented roughly 40% of the estimated revenues for the general budget due to a sharp cycle of oil assets.”
Due to these two shocks, the internal public debt in Iraq amounted to approximately 73 trillion dinars, according to the Sudanese financial advisor. For this reason, the financial authority borrowed money from the government banking market, primarily through the issuance of treasury bonds or yearly treasury transfers that carried an average interest rate of roughly 3%.
Even if the Iraqi government has a sizable stockpile of hard currency and a comfortable financial surplus, the amount of its foreign debt raises numerous doubts regarding the rationale for its non-payment.
