Former Iraqi Member of Parliament Mahasin Hamdoun has warned against approving the proposed 2026 External Borrowing and Grants Law as a solution for funding government salaries, arguing that continued reliance on borrowing could significantly increase Iraq’s debt burden.
Speaking on Saturday, Hamdoun said Iraq’s combined internal and external debt has already exceeded $100 billion. She cautioned that approving additional external borrowing could push the country’s total debt above $150 billion in the coming years.
According to Hamdoun, the proposed borrowing law cannot be passed quickly through Parliament. She explained that the legislation would first need to be reviewed by the Finance Committee and other relevant authorities before being debated and voted on by lawmakers, a process she said could take more than a month.
Hamdoun stressed that continuing to finance budget needs through borrowing is not a sustainable long-term strategy. In her view, increasing debt levels would place additional financial pressure on the state and future budgets.
Instead, she called for alternative measures to strengthen public finances and reduce dependence on loans. Among the solutions she suggested were stronger efforts to combat corruption, improve the collection of outstanding debts owed by companies, and expand Iraq’s oil export options to generate additional revenue.
She argued that these measures could help support the federal budget while limiting the need for further borrowing and reducing the financial burden on the country over the long term.
Her comments come as discussions continue over Iraq’s fiscal challenges, budget financing needs, and the balance between borrowing, revenue generation, and economic reform.
