The dinar rises and trade falls... a monetary paradox that confuses markets and curbs consumption.
Amid an atmosphere of cautious anxiety, Iraqi markets are gripped by a deep recession, with economic indicators intersecting with political variables, creating a stagnation-ridden business environment characterized by stagnation and low expectations.
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The sharp decline in purchasing power, the chronic volatility of the dinar's exchange rate against the dollar, and the government's shrinking spending are all symptoms of a complex problem that extends beyond the market to touch upon the very structure of Iraq's rentier economy.
The manifestations of this stagnation are manifested in a state of "passive waiting" prevalent among consumers and traders. Despite its relative recovery, the dollar has become a source of suspicion rather than a catalyst for activity. The more the price declines, the more markets freeze, and citizens withdraw from the trading scene in hopes of further declines. This turns purchasing into a financial bet. An Iraqi economist summed it up by saying, "Demand in Iraq no longer follows need, but rather monetary sentiment."
The statements of Rashid Al-Saadi, a representative of the Baghdad Chamber of Commerce, are an indication of the growing entanglement between economics and politics. He clearly pointed to the impact of the Central Bank's decisions, the budget delays, and the reduced reliance on the parallel market. These observations reinforce the conviction that the issue goes beyond market fluctuations to the declining effectiveness of fiscal and monetary policy tools, given the absence of a proactive state role that can absorb shocks.
The repercussions extend to a darker landscape as experts speak of business losses, a shrinking real estate market, a decline in investment, and a weakening confidence in the effectiveness of monetary policy. These indicators reveal a flaw in the Iraqi economy's equation, which is based on government spending that is only achieved through the approval of a budget, oil revenues that are slowly translated into projects, and a legislative structure that hinders market flexibility rather than protecting it.
It appears that the state, as the economic center of gravity, has become a bystander or a deferent, which has pushed the market toward a horizontal recession across various sectors, from real estate to automobiles, from tourism to trade, without the decline in inflation having any significant revival effect.
In contrast to this bleak landscape, some sectors, such as agriculture, the food industry, and e-commerce, appear less affected. However, they remain exceptions that do not alter the nature of the dilemma. The problem is structural, requiring urgent monetary and legislative reforms to restore investor confidence, curb market volatility, and recalibrate the relationship between the state and the private sector, moving away from improvisation and persecution rather than partnership.
Economic recession hits Iraqi markets
Economic recession hits Iraqi markets amid dollar volatility and weak spending.
Iraqi markets are currently experiencing an unprecedented economic recession, with commercial activity declining significantly and corporate sales plummeting to alarming levels. At the heart of this situation are merchants and business owners, helpless in the face of mounting financial crises, fluctuating dollar exchange rates, and weak government spending, which have led to a contraction affecting all aspects of the market.
Dollar volatility freezes the market
Rashid Al-Saadi, spokesman for the Baghdad Chamber of Commerce , believes that the market's recession is not an emergency.
Rather, it is the result of an accumulation of complex political and economic factors. He explained that fluctuations in the dollar price on the parallel market are prompting traders and consumers to be cautious.
While everyone is waiting for the exchange rate to stabilize, this leads to a slowdown in demand, especially in the wholesale and retail sectors.
Al-Saadi said that the recent rise in the exchange rate of the dinar against the dollar, which reached 139,500 dinars per 100 dollars after it was 148,000,
This has caused a decline in business activity. He added that market stability often restores some movement,
But it quickly becomes confused by changing financial policies and negotiations with global institutions.
Government weakness deepens the crisis
On the other hand, Al-Saadi pointed out that the delay in approving the general budget, especially the investment budget, deepened the effects of the recession, as this budget represents a major lifeline for supporting the market. Furthermore, the decline in government spending, coupled with rising temperatures, contributed to a decline in demand for goods, particularly luxury goods.
Al-Saadi addressed the impact of the dollar's decline on the tourism sector, stressing that the narrow gap between the official and parallel exchange rates has reduced the feasibility of travel, leading to a decline in foreign tourism.
The economy is faltering and traders are in pain.
Economist Ahmed Al-Ansari described the situation as a "deep crisis," warning of the repercussions of recession on the Iraqi economy. He emphasized that the appreciation of the dinar, despite its apparent benefits, has harmed local products, making them unable to compete with cheaper imported goods.
Al-Ansari explained that some traders who imported goods in dollars incurred losses when converting their profits into dinars. He also noted that weak confidence in monetary policies has exacerbated market volatility, with consumers and importers postponing purchasing decisions in the hope of further price declines.
The real estate sector faces the unknown
In the same context, Hassan Emad, a businessman and real estate dealer, expressed his concern about the Central Bank's decisions, particularly those related to tracking sources of funds and restricting transfers. He emphasized that these measures have created a climate of fear among traders, especially in light of the rampant money laundering cases.
He also noted that there are delays in import operations due to customs and border crossing decisions, contributing to higher costs and declining activity. He emphasized that the real estate sector's suffering extends to all merchants, who are facing a sharp decline in sales and purchase activity.
Will the market survive the recession?
Ultimately, while some sectors, such as agriculture, manufacturing, food, and digital services, remain resilient, Iraqi markets are in dire need of immediate government intervention to restore confidence and inject liquidity. Without bold action, this recession could turn into a prolonged recession from which recovery will be difficult.
Workshop on localizing the gold industry and strengthening craft workshops
The Central Agency for Standardization and Quality Control held a workshop at the agency's headquarters under the title "Localizing the Gold Industry and Strengthening Craft Workshops."
In his opening remarks at the workshop, the head of the Central Agency emphasized the role of the precious metals sector in strengthening the national economy, pointing to the need to enhance trust between local manufacturers and the public by ensuring the quality of jewelry and its freedom from commercial fraud.
He also commended the agency's role in protecting citizens from unfair practices, stressing its commitment to supporting local industries in accordance with international quality standards and in line with Iraq's vision for achieving sustainable economic development.
For his part, Kazem Attia Al-Shammari, a member of the Parliamentary Committee for Economy and Trade, emphasized the importance of strengthening national industries, particularly in the fields of gold and handicrafts. He noted that this would help attract investment by providing a business environment subject to quality and transparency standards.
Ghassan Sakban Kazim, Director of the Qirat Foundation for Economic Development, presented a video explaining the work of specialized gold-making workshops, with a detailed explanation of the foundation's goals of supporting national industry and facilitating procedures between the public and private sectors. He also addressed ways to overcome obstacles facing industrialists to ensure their compliance with technical and legal standards.
The workshop included a discussion session chaired by the Director General of the Standardization Department, Mohammed Latif Ahmed, with the participation of the Assistant Director General, Mustafa Saad Khazal, and the Director of the Qirat Foundation. Numerous proposals and questions were raised and answered, taking into account the workshop's concluding recommendations.
The workshop was attended by Prime Minister's Advisor Hussein Allawi Al-Najm, a representative of the Organized Crime Directorate, a number of general managers, and a number of Central Agency for Public Mobilization and Statistics (CAP) staff and goldsmith workshop owners, reflecting both official and popular interest in developing this vital sector.
Government statement: The mechanism for selling dollars through the official platform regulates exchange rates.
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The Ministry of Planning confirmed on Thursday that the dollar selling mechanism through the official platform regulates exchange rates.
A statement by the Planning Department received by ( IQ ) stated that "the Department of Economic and Financial Policies at the Ministry of Planning organized a dialogue session entitled: "The Dollar's Journey in the Iraqi Economy," in the presence of the Director General of the Department, Sabah Jundi Mansour, and a number of specialists."
According to a statement presented by the Macroeconomics Division of the Macroeconomic Policy and Economic Modeling Department, the session reviewed the evolution of the relationship between the Iraqi dinar and the US dollar since 2003, highlighting the role of the currency auction and its impact on achieving monetary stability and regulating foreign trade, as well as its repercussions on the local exchange market.
Participants emphasized that "the dollar-selling mechanism through the Central Bank of Iraq's official platform has effectively contributed to controlling exchange rates and ensuring the availability of foreign currency for import operations, despite the structural challenges facing this mechanism, particularly in light of international pressures and global banking compliance requirements."
According to the statement, the session witnessed "widespread interaction from attendees, who raised important questions related to the future of the Iraqi dinar and the possibility of reducing reliance on the dollar by diversifying sources of foreign currency and strengthening export sectors."
Iraqi Planning Ministry Explores "Dollar Journey" in Iraqi Economy
The Ministry of Planning has hosted a consultative session on the "Journey of the Dollar in the Iraqi Economy: Between Monetary Policy and the Market."
Organised by the Department of Economic and Financial Policies, the session brought together department heads and staff to analyse the sources, flows, and impact of foreign currency-primarily the US dollar-on Iraq's economy.
Fatima Mohsen Mohammed, Head of the Macroeconomics Division in the Economic Policy and Modelling Department, explained that oil exports account for approximately 95% of Iraq's foreign currency inflows and more than 90% of state revenues. Other sources include:
- Remittances from Iraqis abroad (2-3%)
- Non-oil exports, such as dates, sulfur, phosphates, and basic agricultural and industrial goods (1%)
- Foreign investments and international aid, including loans, grants, and support from institutions like the IMF and World Bank (variable)
- Religious tourism, which contributes 1-2%
- Airlines, transport, and services sectors, which currently have minimal dollar inflow impact
The discussion also examined the stages and mechanisms by which dollars enter Iraq and the interaction between monetary policy and market dynamics in influencing those flows.
House of Representatives agenda next Saturday
Republic of Iraq House of Representatives
Republic of Iraq Majlis al-Nawab
The fifth election cycle of the fourth legislative year of the second legislative season
Schedule of works
Site 2 / August
Recitation of verses from the Holy Quran
department
First: Reference to the Second Amendment to the Political Prisoners Act No. 1 of (Committee on Martyrs, Victims and Political Prisoners), (2 Articles).
Second: Voting on the bill to ratify the mutual investment incentive and protection agreement between the Government of the Republic of Iraq and the Government of the Kingdom of Saudi Arabia. (Foreign Relations Committee), (1) Article).
Third: Drafting the First Amendment to the Law on the Basis of Equalization of Arabic and Foreign Scientific Degrees No. (20) of Higher Education and Scientific Research Committee, (18) Article).
Fourth: Reference to the Paradise Renewed Energy Regulation Law, Article 23).
Fifth: Referendum on the Freedom of Expression, Peaceful Assembly and Demonstration Bill. Paradise Human Rights (17) Article).
SADSA: First reading of the Iraqi University of Security Sciences Bill. Paradise, Security and Defense), (29) Article).
Seven: Statement and Discussion of the Second Reading of the First Amendment to the Civil Defense Law No. 11 of 2013 (Security and Defense Committee of the Legislative Committee). thighs
Second: Speech and discussion of the second reading of the bill on regulating the rights of the victims of Ibn al-Khatib Hospital, the victims of Al-Niqa'a Center and the victims of the Hamdaniya incident in the Martyrs' Council and Political Prisoners, Health and Environment Committee).
Tasa'a: Lecture and Discussion of the Second Reading) Promulgating the Environmental Protection and Improvement Law. (Health and Environment Committee).
The session will start at one o'clock after dark
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Iraq to increase oil production in August
Financial advisor to Prime Minister Mohammed Salih revealed Iraq's intention to increase its crude oil export production over the next month.
He said in a press statement followed by (Video News Agency) that the OPEC+ meeting held in June 2025 approved a gradual easing plan for the additional voluntary production cuts that eight countries have committed to since 2023, noting that these countries will collectively begin gradually increasing their production by 548,000 barrels per day until September 2025.
He explained that Iraq had been committed to an additional voluntary cut of about 220,000 barrels per day since the beginning of 2024, and according to the new easing plan, it will be allowed to gradually increase its production starting next August.
The list of countries that will implement this increase includes Saudi Arabia, Iraq, the UAE, and Kuwait, in addition to Russia, Algeria, Oman, and Kazakhstan. The percentages of the increase will be distributed differently among these countries based on an internal agreement within the alliance.
The Organization of the Petroleum Exporting Countries and its allies in the OPEC+ alliance decided to increase the production of eight member countries, as part of a plan to gradually ease the voluntary cuts, starting in August 2025 and continuing until September of the same year.
It is noteworthy that the federal government announced on July 17 that it had reached an agreement with the Kurdistan Regional Government to resume crude oil exports from the region after a halt of more than two years, following drone attacks targeting the region's oil fields.
The agreement stipulates that the regional government will immediately begin delivering all oil produced from the region's fields to the State Oil Marketing Organization (SOMO) for export, with the current delivered quantity not being less than 230,000 barrels per day, plus any increased production.
Under the agreement, the federal Ministry of Finance is obligated to pay the regional government an advance of $16 for each barrel delivered, and 50,000 barrels per day will be allocated for domestic consumption within the region.
Iraq is OPEC's second-largest oil producer, exporting approximately 3.5 million barrels of crude oil per day.
Oil is not another reason delaying the submission of budget tables to Parliament, and a warning against entering 2026 without them.
Qusay told Al Furat News: "The delay in sending it is not only related to fluctuating oil prices, but also to a government attempt to audit the numbers of employees, retirees, and those covered by welfare and the ration card, which may reveal exaggerations and inaccurate funding in some items over the past years."
He added, "Financial and economic stability requires sustaining spending rates at levels similar to those recorded in the 2024 budget, which amounted to approximately 360 trillion dinars," noting that "a decline in public spending could lead to an economic contraction, particularly in items related to new projects and job opportunities."
Qusay explained that "the government continues to spend on salaries, pensions, welfare, and the food basket, as these are governed by laws. However, investment agreements and development projects require financial schedules to ensure sustainable funding and reduce unemployment rates."
He pointed out that "budget tables represent an important reference for the private sector, which relies on them to plan imports and investments," noting that "the absence of these tables will lead to economic confusion, requiring urgent intervention from Parliament to avoid entering the next year without a legal basis for spending."
In a related context, Qusay noted that "oil prices during the first half of 2025 reached approximately $70 per barrel," stressing that "the future outlook for the markets indicates the possibility of prices rising due to increased demand from China and the United States and improved understandings between the European Union and the United States, which could push the price to $73."
Regarding production policy, the expert concluded by saying, "The Ministry of Oil is determined to increase production capacity to nearly 6.5 million barrels per day over the coming years, while Iraq's OPEC quota is gradually increasing by 50,000 barrels per month in preparation for returning to the production capacity approved in November 2023."
Done The Center for Banking Studies was established by the Central Bank of Iraq pursuant to Law No. (36) of 1999. It serves as its official training arm, implementing international best practices and honing the technical and administrative skills of employees in the financial and banking sector. The vision is to become the leading knowledge-based center for financial services in Iraq through excellence in skills development and the provision of integrated knowledge services to the financial sector. It also aims to contribute to spreading financial and banking awareness in society, and to become a bastion of the most effective and modern methods and means in the field of financial consulting, training, and human resource development, in accordance with the latest international and regional standards.
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