"Terrifying numbers"... Borrowing swallows budgets and the future of the Iraqi economy is "uncertain"
Warnings are escalating as public debt continues to rise in Iraq. Official and international data reveal a worrying upward trend in the volume of internal and external debt, which portends serious repercussions for the stability of the national economy.
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Experts confirm that the lack of transparency and weak coordination between state institutions have made the financial situation one of the most complex challenges in recent years. Data published by the American website "Trading Economics" showed that Iraq's debt-to-GDP ratio
rose to 42.9% in 2024, compared to 42.1% in 2023.
According to the report, this rate remains significantly lower than the levels of Arab countries such as Sudan (272%) and Lebanon (164%), but it highlights the fragility of the Iraqi economic situation, especially with the continued near-total dependence on oil revenues.
The Central Bank of Iraq previously announced that domestic public debt continued to rise by the end of June 2025, reaching 87.7 trillion dinars, an increase of 2.56% from May and 19.5% from 2023.
The bank attributed this jump to an increase in the disbursement of farmers' dues, which amounted to 14.8 trillion dinars, up from only 12.5 trillion dinars in the previous period.
According to the bank's data, the debts were distributed among treasury transfers to the Central Bank and commercial banks (51 trillion
dinars), transfers to the Ministry of Finance (2.03 trillion dinars), and loans to financial institutions amounting to 19.1 trillion dinars.
Lack of an Accurate Budget
: Economist Abdul Salam Hassan warned of the dangers of continuing this approach, stressing that "the absence of an accurate budget makes it difficult to know the actual amount of spending or estimate the extent to which the funds disbursed are being utilized."
Hassan told Al-Mada: "Iraq lacks a unified economic system, as each entity operates in isolation from the others. The region has its own financial policies, while the federal government pursues different policies, which deepens the state of economic chaos."
He added that "the lack of transparency has made citizens lose confidence in the state's ability to pay its employees' monthly salaries, especially since the government sometimes resorts to withdrawing from the pension fund to cover other expenses, which disrupts the financial balance in the long term."
Uncontrolled government spending
For his part, economic expert Basem Antoine explained that "the rise in public debt is primarily due to excessive government spending, which exceeds the size of actual revenues.
" Antoine told Al-Mada: "Relying solely on oil revenues makes the economy vulnerable to fluctuations in crude oil prices, as any decline in prices leads to a significant drop in revenues and an increased need for borrowing."
He added that "weak domestic production in agriculture, industry, and tourism has contributed to the widening gap between what Iraq consumes and what it produces, which is the primary reason for the continued rise in debt year after year," stressing that "the lack of discipline in spending and the uncontrolled disbursement of funds hinders any possibility of controlling the debt."
An economy dependent on oil.
Experts believe that Iraq remains hostage to oil prices in the absence of structural reforms. Although the debt-to-GDP ratio appears low compared to Arab and European countries, the fragility of revenues means that any oil crisis could explode a huge fiscal deficit.
Experts believe that the most dangerous aspect of the rising public debt is the widening fiscal deficit and the erosion of the state's ability to
finance basic services.
Economists assert that as the volume of loans expands, an increasing proportion of the budget will be spent on debt servicing rather than investing in infrastructure or supporting productive sectors. This will ultimately weaken economic growth and increase the state's reliance on recurring borrowing to cover the deficit. This creates a vicious cycle that could lead to a stifling financial crisis if oil prices decline or exports are disrupted for any external reason.
Government Advisor: The digital sector is a driver of development and an engine of economic diversification.
Saleh stressed to Al Furat News Agency that "establishing national digital platforms to support entrepreneurs and small and medium-sized enterprises represents an important employment engine," emphasizing that the digital economy is a true lever for economic diversification, given its superior ability to transcend geographical borders and traditional structures, and to connect Iraq, which is rapidly accelerating, with the global economic system.
Saleh pointed out that this transformation requires high-level institutional coordination between various government sectors, based on strategic investments in human infrastructure and modern technology. He explained that this step requires the development of comprehensive and sustainable development plans to build the "economy of the future."
He emphasized that the matter goes beyond being a mere economic process, becoming a strategic shift in the course of the state and society, and an "irreversible project" within the efforts to diversify the national economy.
Parliamentary Finance Committee: Parliament will not pass the budget tables... for these reasons
The Parliamentary Finance Committee has settled the controversy over the approval of the federal general budget law schedules in the House of Representatives.
Member of the committee, MP Jamal Kocher, said in a statement to the National Iraqi News Agency ( NINA ): "Parliament cannot, during the remaining period of its term, pass the budget schedules, due to the lack of time and the absence of Parliament sessions due to political differences over some laws." He pointed out: "Parliament will end its term after the twenty-fifth of this month, according to the Parliament Law, which stipulates that Parliament's term ends 45 days before the new parliamentary elections."
He explained: "The government is working according to the budget law passed in Parliament for three years, and also disbursing dues according to the 1/12 principle, due to the lack of budget schedules for the year 2025."
Regarding the disbursement of funds for current and future projects, Kocher explained that they: "will be carried over to the 2026 budget, and this applies to the dues related to amending the Ministry of Education Law, which was recently voted on by Parliament."
On August 4, Member of the Legal Committee MP Raed Al-Maliki confirmed in a press conference held in the House of Representatives that there is a major violation on the part of the government and the Ministry of Finance by not sending the budget tables yet.
He added: "There is a delay and refusal by the government to send the budget tables, which is a constitutional and legal violation identified by the Public Prosecution Office."
Al-Sudani: Iraq is in the eye of the storm
Prime Minister Mohammed Shia al-Sudani warned on Saturday that regional and international security, political, and environmental challenges "have placed Iraq at the eye of the storm." He also highlighted Iraq's ambition to become a gateway for 20 percent of Asian trade to Europe through the Development Road project.
In a speech during the launch ceremony of Iraq's Vision 2050, Al-Sudani said, "Today we stand before a major national moment that embodies the state's will to restore its standing in the region and the world. Countries and their leaders must launch creative ideas to defuse crises and disasters."
Al-Sudani added, "Regional and international security, political, and environmental challenges have placed Iraq at the center of the storm, and national responsibility requires openness and frankness that these challenges target the stability of the state."
Al-Sudani continued, "Climate and environmental disasters have begun to undermine the foundations of water and food security in countries, and it is imperative that countries, including Iraq, take steps to mitigate the crisis if it occurs."
The Prime Minister noted that "the initiative to formulate the initial concepts for Iraq's Vision 2050 began in 2023," stating that "our goal is to reduce dependence on oil and achieve sustainable growth."
The Prime Minister affirmed, "We signed the consultancy contract between the Ministry of Planning and KBR in accordance with Iraq's Vision 2050. For the first time in the history of the Iraqi state, the government took the initiative by launching the executive policy document for strategic governance."
He emphasized that "the general direction of Iraq's Vision 2050 is to ensure that it covers comprehensive and promising sectors, and we look forward to Iraq being free of oil revenues in the coming decades."
Prime Minister: The private sector is a key partner in various projects.
Prime Minister Mohammed Shia Al-Sudani affirmed, on Saturday, that the Iraqi private sector is a key partner in various projects, noting that Iraqi contractors have proven their capabilities in various sectors in which the government has engaged them to work.
The Prime Minister's media office said in a statement received by the Iraqi News Agency (INA): "Prime Minister Mohammed Shia Al-Sudani received the head of the Iraqi Contractors Union, Ali Fakher Al-Sanafi, and his accompanying delegation."
Al-Sudani stressed, according to the statement, "his keenness to support federations and unions, in all their formations, especially those concerned with development and investment projects, including the Contractors Union; due to its importance and specificity in promoting construction and reconstruction and supporting the national economy."
The Prime Minister pointed out "the government's confidence in the capabilities of the Iraqi private sector, which represents a key partner in various projects, and Iraqi contractors have proven their capabilities in various sectors in which the government has engaged them to work."
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Türkiye agrees to resume Kurdistan oil exports, with companies selling for $16 per barrel.
Oil expert Bahjat Ahmed confirmed on Saturday (September 20, 2025) that Turkey has agreed to resume exports of Kurdistan Region oil via the Turkish port of Ceyhan. He noted that the previous agreement signed between Baghdad and Ankara remains in effect until July 2026, allowing for the resumption of exports without legal or procedural obstacles.
Speaking to Baghdad Today, Ahmed said, "The previous agreement signed between Iraq and Turkey is valid until July 2026, and thus oil exports can resume. Ankara is also pressuring Iraq to resume exports via SOMO to ensure the renewal of the agreement with the Iraqi government." Institutional experts interpret this Turkish pressure as part of a broader effort to ensure continued economic returns and protect Ankara's energy interests in the region.
Ahmed added, "The tripartite oil agreement between Baghdad, Erbil, and foreign oil companies will go ahead this time, as it is beneficial to all parties. The oil companies will receive their financial rights in the form of oil, at a value of $16 per barrel. This is beneficial for the companies, as they will not have to wait to receive their rights, and it is also beneficial for the federal government, which will not pay money but oil, as it is facing a liquidity crisis." Independent research estimates indicate that this model of "in-kind payments" will ease the financial pressure on Baghdad and restore confidence to foreign companies.
An informed source reported on Friday that the three parties—the Kurdistan Region, the federal government, and the oil companies operating in the region—had reached an agreement paving the way for the re-export of the region's oil. In a statement followed by Baghdad Today, the source said, "A tripartite agreement has been reached between the regional government, the central government, and the oil companies," indicating that "the agreement is scheduled to be signed next week and enter into force in the coming days."
The source added, "The Ministry of Natural Resources in the region expressed its approval last night of the observations of the federal Ministry of Oil, and the two parties signed a memorandum of joint agreement." He pointed out that "the agreement stipulates that the region will retain 50% of the oil produced for domestic use, while the remainder will be exported through the State Oil Marketing Organization (SOMO)," noting that "the federal government will pay the oil companies' dues, and the price of the produced barrel was estimated at $16."
According to modern political approaches, the resumption of exports via Ceyhan is not merely an economic issue. Rather, it reflects a rebalancing of the balance between the center, the region, and Ankara in light of financial pressures and the need of the three parties for a balanced formula that preserves their shared interests.
PM Barzani urges Baghdad to honor Kurdish rights as oil deal advances
Oil companies in the Kurdistan Region and Iraq’s federal government reached an initial understanding on payments covering crude production costs, Kurdish Prime Minister Masrour Barzani said on Saturday.
During the inauguration of the Sheikhan–Lalish road in Duhok province, Barzani said talks with Baghdad on the federal budget and salaries for public employees in the Kurdistan Region are ongoing. “There are no obstacles from our side, but excuses are being created by others,” he said. “We are working to remove them and secure the financial rights of our people.”
He added that progress in negotiations between Baghdad and oil firms marks “an important step toward a final agreement.”
“I hope this understanding will be realistic and accepted by all, and that the federal government will uphold the rights of Kurdistan’s citizens,” Barzani said. He stressed that salaries must not be used as a bargaining tool or reduced to daily media headlines.
This week will be decisive for salaries and important meetings will be held
This week, especially tomorrow Sunday, will be very important for the fate of the salaries of the Kurdistan Regional Government employees. A tripartite agreement is expected to be signed between the Kurdistan Regional Government (KRG) Ministry of Natural Resources, the Iraqi Oil Ministry and oil producing companies in Kurdistan to resume oil exports.
The big picture: The opening of the blind spot between Erbil and Baghdad is near, both sides continue their talks and negotiations with the prospect of resolving their issues and paying the salaries of Kurdistan employees, this week's meetings will be important and decisive. The Iraqi Oil Ministry has approved a proposal by the Kurdistan Regional Government (KRG) and companies to pay oil instead
of cash as compensation for their financial rights.
Official statement: Peshawa Hawrami, spokesman for the Kurdistan Regional Government, told Ava that the companies and the federal government have reached an agreement. He said the oil issue was "a salary knot" and that if there were no new changes, the issue would be resolved.
Next step: The second and final step to resolve the salary issue is related to the distribution of non-oil revenues in the Kurdistan Region. Good progress has been made in this regard. The State Council has reached a conclusion and adopted an opinion to resolve the dispute. The State Council is expected to prepare an official letter to Prime Minister Mohammed Shia Sudani and the Council of Ministers on Sunday. The opinion is reportedly "in the interest of the Kurdistan government" and will be sent in the next two days.
Peshawar Hawramany explained that the federal government is waiting for the response of the State Council to start sending the salaries of the Kurdistan Region, which includes the salaries of previous months and next months.
What to expect: Both issues, oil and non-oil revenues, are expected to be taken up at this week's meeting of the Iraqi Council of Ministers on Tuesday. A crucial decision on this year's salaries is expected to be made there.
Iraq's CF demands guarantees from US
Iraq's ruling bloc, the Coordination Framework (CF), delivered a message to the United States through Iraq’s presidential delegation attending the 80th session of the United Nations General Assembly in New York, a source reported to Shafaq News on Saturday.
According to the source, the CF —a political alliance of predominantly Shiite parties— seeks assurances that the US will uphold the recent security agreement, shield Iraq from external attacks under any pretext, andhonor the agreed timeline for US troop withdrawals.
He added that Washington’s response could shape the trajectory of bilateral relations, particularly in economic and investment sectors, noting that Iraq has fully met its obligations under the deal.
The security partnership between Iraq and the United States is based on key agreements, including the 2008 Strategic Framework Agreement (SFA) and the Status of Forces Agreement (SOFA), which define the framework for military cooperation and the presence of US troops.
The President of the Republic heads to America
- President of the Republic, Abdul Latif Jamal Rashid, headed to the United States of America today, Saturday (September 20, 2025), to participate in the meetings of the United Nations General Assembly in New York.
The media department of the Presidency of the Republic stated in a statement received by "Baghdad Today" that "President of the Republic, Abdul Latif Jamal Rashid, headed to the United States of America to participate in the meetings of the United Nations General Assembly in New York in its (80) session."
She added, "The President is heading an official delegation that includes Deputy Prime Minister and Minister of Foreign Affairs Fuad Hussein, Deputy Prime Minister of the Kurdistan Region Qubad Talabani, Minister of Health Saleh al-Hasnawi, Minister of Migration and Displacement Evan Faeq Jabro, and National Security Advisor Qasim al-Araji, in addition to a number of officials."
Nizar Haidar reveals: Al-Sudani is unwanted in Washington and failed to travel to New York.
Independent politician Nizar Haider revealed in an exclusive tweet that Iraqi Prime Minister Mohammed Shia al-Sudani will not participate in the UN General Assembly meetings scheduled to be held in New York.
The tweet explained that President Abdul Latif Rashid would travel to New York instead to represent Iraq, noting that Al-Sudani had previously traveled to the United States during President Joe Biden's term in 2023 and 2024, but that he was now considered unwelcome in Washington.
Haider confirmed that all of al-Sudani's attempts to travel to the United States had failed, despite his repeated efforts to do so, reflecting the deteriorating relationship between the current Iraqi government and the White House.
This development raises questions about the future of the US role in supporting the Iraqi government, as well as its impact on Iraq's foreign policy in the coming period.
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Special and exclusive
President Latif Rashid is in New York to attend the United Nations of Sudan's Golden Crescent State Summit in New York In 2023 and 2024, he is now undesirable in Washington for all travel routes to the United States, but all attempts have failed
NH
The Iraqi delegation arrives in New York. The Foreign Ministry reveals details of the visit.
announced Iraqi Ministry of Foreign AffairsOn the arrival of the Iraqi delegation headed by the President of the RepublicAbdul Latif Jamal RashidTo New York to participate in the UN General Assembly meetings.
Iraq's first industrial-scale solar plant opens to tackle electricity crisis
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Iraq is opening its first industrial-scale solar plant in Karbala province
Iraq is set to open the country’s first industrial-scale solar plant Sunday in a vast expanse of desert in Karbala province, southwest of Baghdad.
It’s part of a new push by the government to expand renewable energy production in a country that is frequently beset by electricity crises despite being rich in oil and gas.
“This is the first project of its type in Iraq that has this capacity,” said Safaa Hussein, executive director of the new solar plant in Karbala, standing in front of row after row of black panels. From above, the project looks like a black-clad city surrounded by sand.
The plant aims to “supply the national network with electricity, and reduce the fuel consumption especially during the daytime peak load, in addition to reducing the negative environmental impact of gas emissions,” he said.
The newly opened solar plant in Karbala will eventually be able to produce up to 300 megawatts of electricity at its peak, said Nasser Karim al-Sudani, head of the national team for solar energy projects in the Prime Minister’s Office. Another project under construction in Babil province will have a capacity of 225 megawatts, and work will also begin soon on a 1,000 megawatt project in the southern province of Basra, he said.
The projects are part of an ambitious plan to implement large-scale solar power projects in an effort to ease the country’s chronic electricity shortages.
Deputy Minister of Electricity Adel Karim said Iraq has solar projects with a combined capacity of 12,500 megawatts either being implemented, in the approval process, or under negotiation. If fully realized, these projects would supply between 15% and 20% of Iraq’s total electricity demand, excluding the semi-autonomous northern Kurdish region, he said.
“All the companies we have contracted with, or are still negotiating with, will sell us electricity at very attractive prices, and we will in turn sell it to consumers,” Karim said, although he declined to disclose the purchase rates
Despite its oil and gas wealth, Iraq has suffered from decades of electricity shortages because of war, corruption and mismanagement. Power outages are common, especially in the scorching summer months. Many Iraqis have to rely on diesel generators or suffer through temperatures that exceed 50 degrees Celsius (122 degrees Fahrenheit) without air conditioning.
Currently, Iraq produces between 27,000 and 28,000 megawatts of electricity, Karim said, while nationwide consumption ranges from 50,000 to 55,000 megawatts. Power plants fueled by Iranian gas contribute about 8,000 megawatts of the current supply.
Iraq’s heavy reliance on imported Iranian gas, as well as electricity imported directly from Iran to meet its electricity needs, is an arrangement that risks running afoul of U.S. sanctions.
Earlier this year, Washington ended a sanctions waiver for direct electricity purchases from Iran but left the waiver for gas imports in place.
Iraqi traders discuss developing import and export at the Tradex Summit in Erbil.
The Kurdistan Region Importers and Exporters Union held the Tradex Summit in Erbil Governorate, with the participation of a large number of businessmen, investors, and experts in the field of trade and economics.
The summit, held today, Saturday, aims to develop the digital trade system, strengthen the position of the local market, and connect it to regional and international markets.
A Shafaq News Agency correspondent reported that the summit provided an important platform for discussing the latest innovations and technological solutions in the field of trade, as well as reviewing successful experiences in digital transformation, which contributes to raising the efficiency of the private sector and opening new horizons for investors.
He added that the summit's activities included extensive discussions on ways to enhance the business environment in the Kurdistan Region and expand trade cooperation networks, thus consolidating the region's presence on the global economic map and giving it a greater role in keeping pace with rapid economic developments.
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