economic professional Manar Al-Obaidi has issued a robust warning concerning the structural stability of the Iraqi banking system, revealing a huge shift in property faraway from foreign reserves and toward debt. The analysis, primarily based on crucial bank of Iraq statistics for the primary half of of 2025, indicates that whilst general banking device property grew by means of five% to about 275 trillion Iraqi Dinars, this growth is overlaying a fundamental danger.
The analysis highlights an alarming trade in the composition of property in comparison to the previous year. the proportion of foreign reserves, a pillar of the device’s security, dropped from 68% of total assets to fifty eight% in H1 2025. Conversely, the combined share of government and personal debt soared to 32% of general property, up from 24% in the first half of of 2024.
The number one driving force of this shift is the big increase in government debt, which noticed a 116% leap compared to the same period final year. Al-Obaidi argues that this debt is commonly used to fund non-productive operational prices, inclusive of the general public payroll, in preference to being invested in revenue-generating tasks.
Al-Obaidi warns that if this trend continues, the stableness of the complete banking machine is jeopardized. the continued rapid boom in government debt, that’s absorbing the banking zone’s liquidity, threatens to push the entire debt percent past 50% of the machine’s assets inside the near destiny. This structural vulnerability undermines the monetary protection of the banking system and the price of the Iraqi Dinar.
