Iraq faces looming fiscal crisis amid oil revenue decline

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Iraq faces looming fiscal crisis amid oil revenue decline

Iraq is heading toward a severe monetary disaster, lawmakers and economists warned on Tuesday.

Finance committee member Mohammed al-Shabaki stated key monetary indicators point to rising deficits and cash shortfalls, blaming the crisis on declining crude prices, budget delays, and Iraq’s loss of financial devices.

“Iraq lacks tools like ahead contracts, foreign investments, and emergency reserves used by different international locations to hedge against downturns,” he advised Shafaq information, including that existing safeguards might also ultimate no greater than two years.

The 2025 finances became to start with projected at $152.75 billion, with $ninety nine.3 billion allotted for spending, leaving a balance anticipated to roll over into the subsequent year.

Shabaki urged urgent steps to raise non-oil revenues to at the least 30% of overall profits—up from the modern-day three–four%—via sturdy taxation and series measures insulated from political interference.

Economist Saleh al-Hamashi assigned direct responsibility to the Finance Ministry and valuable bank, mentioning their failure to flow into liquidity thru the banking gadget. “people are hoarding coins at domestic due to low agree with in banks, notwithstanding the rollout of digital payments.”

He expected Iraq’s money supply at $ninety seven billion, with 70% held outside the banking device. “This has pressured the authorities to depend on strategic reserves and home borrowing.”

Hamashi additionally criticized the relevant financial institution’s lack of a coherent monetary method, saying it still operates with out a unified financial vision.

one after the other, oil economist Nabil al-Marsoumi warned that Iraq’s April oil revenues slightly protected public sector salaries and licensing bills. He mentioned a 15% drop in month-to-month oil income—from $7.7 billion in March to $6.7 billion in April—because of falling expenses and decreased exports, a decline confirmed with the aid of the Oil Ministry.