The dollar's decline is in the interest of citizens and strengthens the purchasing power of the dinar.
The US dollar exchange rate against the Iraqi dinar continues to fluctuate and experience instability in the local market. Money exchange business owners and shop owners see this as a natural development, given the stability the country is experiencing across the board and the fruits of the government's reform measures to eliminate smuggling and currency speculation in the markets.
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Stabilization of the situation
Hamid Abu Firas, owner of a money exchange company, explained to Al-Masry that “this fluctuation in the exchange rate cannot be called a fall in the dollar price, but rather an increase in the value of the Iraqi dinar against other currencies. Perhaps this decline in the dollar price is a result of the stability of the political, security and social situations in the country, and without a doubt all of this has a positive impact on the exchange rate.” He indicated that “the prices of treasury are now stable and the fluctuation is slight, and this in itself is considered a commendable advantage for the stability of the exchange rate, and in turn is reflected in the prices of goods and commodities in the markets and trade, so we see it as a positive phenomenon in Iraq.”
I am afraid of fluctuations.
“Today we see a decline in the demand for the dollar in the exchange markets and commercial activity, which has created a state of fear among citizens, as the price of the dollar is declining and, on the other hand, gold prices are constantly rising, which has led to a state of confusion among citizens,” said legal affairs specialist Amer Mahdi to Al-Masry. He expressed his hope for a stable exchange rate in which the national currency, the dinar, is at its highest exchange rate compared to other foreign currencies.
A good step
In contrast, citizen Mahdi Al-Maliki told Al-Masry that “any stability in the country, whether political, security, social or economic, is important for the country and eliminates speculation and manipulation in all its forms. This rise in the price of the dinar against the dollar is a great service and benefit to the country and the citizen.” He pointed out that “the government’s reform steps in this area have cut off the path of smugglers and corrupt people in smuggling currencies out of the country, and as a result, all these reforms have had their effects reflected on the ordinary citizen with limited income.” He called on those concerned from the Ministry of Finance and the Central Bank of Iraq to continue their steps to achieve more stability in the market movement and exchange rates.
Government plans
Government agencies previously indicated that the sustained improvement in the dinar's exchange rate against the dollar depended on two key factors: the Central Bank's ability to utilize its foreign reserves as part of its defensive tools, and the Central Bank's success in narrowing the gap between the official and parallel rates.
The Governor of the Central Bank participates in the first international conference on carbon economics in Iraq.
In his speech on the sidelines of the conference, His Excellency said: "This is a favorable opportunity to contribute to preserving an environment exhausted by wars and various pollutions." He mentioned a group of initiatives taken by the Central Bank of Iraq as part of a series of innovative solutions and measures that contribute to mitigating immediate environmental challenges. Among these solutions, the Central Bank, in cooperation with the Higher Committee for Lending in the Council of Ministers, presented an initiative of (1) trillion dinars to shift from the use of traditional sources to renewable energy sources, reduce carbon emissions, and expand green spaces to achieve sustainable development.
He added that the Central Bank of Iraq, in cooperation with the World Bank, worked to develop a green financing model and implement it within the financial sustainability roadmap approved by the Central Bank of Iraq for the period (2023-2029). One of its outcomes was the development of a sustainable financing roadmap for managing environmental, social, and governance (ESG) risks.
Revealing the commencement of granting specialized banking licenses to support climate and environmental conservation through financing green projects, namely Riyada Bank and the Green Bank, and work is underway to integrate these banks soon within the Iraqi banking ecosystem.
He explained that the Central Bank of Iraq has presented important projects, including the rehabilitation of brick factories to convert from polluting fuel (black oil) to cleaner fuel (liquid gas) to reduce carbon emissions, as part of the trillion-dinar initiative, with an amount of 500 million dinars for each factory.
He announced the Central Bank of Iraq's financing of waste recycling projects within the controls of the renewable energy initiative to contribute to reducing soil pollution, especially in sanitary landfill areas, which is an environmental hazard in the future, affecting the type and quality of soil in housing, agricultural, and other projects.
His Excellency concluded: His endeavor to cooperate and provide initiatives in this field stems from his belief in the bank's ability to create a better environment, increase the well-being of society, and overcome the environmental challenges surrounding Iraq.
Media Office
May 21, 2025
Three reasons behind it... Al-Sudani's advisor to Rudaw: About 90% of Iraq's monetary mass is hoarded outside banks.
The fluctuations in the dollar exchange rate in Iraq have a direct impact on citizens' lives.
The Iraqi market has been experiencing instability in the dollar-dinar exchange rate for months, casting a heavy shadow over citizens' daily lives and exacerbating the country's economic crises.
Despite the efforts of the Central Bank of Iraq and relevant authorities to control the market and the exchange rate through regulatory measures and the injection of hard currency, price fluctuations have become an almost daily reality. Iraqi citizens find themselves in a cycle of continuous increases in the prices of food and basic commodities, which are directly linked to the dollar exchange rate.
Ahmed al-Zubaidi, a grocery store owner in Baghdad, says, "Wholesale prices fluctuate with the value of the dollar, forcing us to constantly raise prices. Customers don't always understand, but they also feel frustrated because their salary isn't enough to meet their daily needs."
The repercussions of the fluctuations are not limited to consumer goods, but extend to medicines, building materials, and even transportation services, which have been affected by the rise in the price of fuel, which is partially imported in dollars, exacerbating the suffering of low-income citizens.
In a country where the majority of employees rely on government salaries paid in Iraqi dinars, the fluctuating dollar exchange rate poses a real dilemma. Stable salaries are coupled with persistently rising prices, eroding citizens' purchasing power and forcing many to cut back on spending or resort to loans to cover their basic needs.
Economists believe that the absence of a clear and stable monetary policy, coupled with weak market oversight, could exacerbate the crisis. Dr. Fadhel Alwan, a professor of economics at the University of Baghdad, notes that "the Iraqi market is fragile and is quickly affected by any fluctuations, whether internal or external. Unless there are genuine reforms to the financial system and enhanced transparency in banking transactions, the problem will continue to recur."
In an attempt to mitigate the effects of the volatility, the Iraqi government recently took a series of measures, including increasing the flow of dollars into the market, restricting informal transactions, and supporting some affected groups through social welfare programs. However, observers say these solutions will remain temporary unless the root causes of economic instability are addressed.
A Kurdish delegation visits Baghdad to clarify the "nature" of the oil contracts rejected by the federal government.
An informed source revealed, today, Wednesday (May 21, 2025), that a delegation from the Kurdistan Regional Government, headed by the Minister of Natural Resources, will visit Baghdad next week.
The source told Baghdad Today, "A government delegation from the Kurdistan Regional Government will visit Baghdad after returning from the United States, headed by Minister of Natural Resources Kamal Mohammed."
He added, "The purpose of the visit is to clarify to the federal government the nature of the oil contracts concluded in the United States."
Disagreements over oil contracts between Baghdad and Erbil.
The federal Ministry of Oil confirmed on Tuesday that Kurdistan's contracts for new energy agreements to develop the Miran and Topkhana-Kurdimir fields in Sulaymaniyah province were invalid.
The ministry said in a statement received by Baghdad Today that "some news websites circulated news issued by the Kurdistan Regional Government that included (new energy agreements worth tens of billions of dollars)," noting that "we would like to clarify our rejection of the procedures related to the Ministry of Natural Resources in the Kurdistan Regional Government contracting to invest in the Miran field and the Topkhana-Kurdimir field in Sulaymaniyah Governorate."
The ministry added, according to the statement, that "these measures violate the decisions issued by the Federal Court of Cassation, which indicated the illegality of contracts concluded after the issuance of the Federal Supreme Court's decision in case number (59/Federal 2012 and its unified 110/Federal 2019)."
The ministry noted that "despite Iraq's need to maximize gas investment and meet domestic demand for power generation plants across the country, the measures taken by the regional government constitute a clear violation of Iraqi law, as oil resources belong to all Iraqis." It emphasized that "any action to invest in this resource must be undertaken through the federal government."
She continued, "Based on this, the Ministry affirms the invalidity of these contracts based on the Iraqi Constitution and Federal Court decisions."
Meanwhile, the Ministry of Natural Resources in the Kurdistan Regional Government issued a clarification yesterday, Tuesday, regarding the two agreements concluded with HKN and Western Zagros, confirming that they are not new and that Iraqi courts have previously recognized their legitimacy.
In a statement received by Baghdad Today, the ministry emphasized its "constitutional rights and powers as a federal entity under the Iraqi constitution," explaining that "the only change to the contracts relates to the operating company, and was made in accordance with established legal and contractual procedures."
The statement noted that "the two American companies have been operating in the region for many years and are major oil producers, not new investors."
According to the ministry, the primary objective of these agreements and contracts is to increase natural gas production to fuel power plants, meeting local needs and ensuring the continuity of electricity supply throughout Iraq. This reaffirms that these efforts are in the best interest of the country as a whole.
The federal Ministry of Oil issued a sharp clarification on Tuesday in response to the Kurdistan Regional Government's announcement of "new energy agreements" it had concluded, describing them as "worth tens of billions of dollars."
In a statement, the federal ministry announced its categorical rejection of the measures taken by the Kurdistan Regional Government's Ministry of Natural Resources regarding the exploitation of the Miran and Topkhana-Kurdimir fields in Sulaymaniyah Governorate. The ministry affirmed that these measures are "null and void and violate the decisions of the Federal Court of Cassation and Iraqi law."
Fifth round of US-Iran talks set for Friday
On Wednesday, Oman’s Foreign Minister Badr Albusaidi announced that the fifth round of indirect talks between the United States and Iran will be held in Rome on May 23.
Albusaidi confirmed the date in a post on X, marking the first official detail after weeks of quiet engagement in Muscat and Rome.
His statement followed remarks by Iranian Deputy Foreign Minister Abbas Araghchi, who said Tehran had yet to finalize plans for the upcoming meeting.
Despite continued indirect contact, both sides have shown little indication of tangible progress. Earlier, Iran’s Supreme Leader Ali Khamenei dismissed the possibility of a breakthrough with Washington on either the nuclear or missile tracks.
Analysts view Khamenei’s stance as a sign of entrenched resistance within Iran’s leadership, while Western diplomats caution that without flexibility, the window for renewed engagement may soon close.
Masrour Barzani meets with US Senator Bill Hagerty in Washington
Kurdistan Regional Government Prime Minister Masrour Barzani met with US Senator Bill Hagerty in Washington today, Wednesday, May 21, 2025.
According to a statement from the Kurdistan Regional Government, during the meeting, the two sides discussed in detail the development of bilateral relations and recent developments in Iraq and the region.
Senator Hagerty expressed his satisfaction with the signing of energy agreements between the Kurdistan Regional Government and two American companies. He also expressed his hope that economic and trade relations between the United States and the Kurdistan Region will be further developed.
Prime Minister Barzani, along with his gratitude for the United States' continued support for the Kurdistan Region, emphasized the importance of further strengthening strategic relations between the two sides.
The meeting also discussed the need to respect the constitutional rights and federal status of the Kurdistan Region.
The Minister of Finance chairs a meeting to follow up on the restructuring of Rafidain and Rashid banks.
Finance Minister Taif Sami met Wednesday evening with representatives from Rafidain and Rashid Banks, as well as representatives from Ernst & Young, to follow up on the implementation phases of the government-owned banks' restructuring project.
Finance Minister Taif Sami chaired a joint meeting on Wednesday with the management of Rafidain and Rashid Banks and representatives from Ernst & Young, a consulting firm, to follow up on the implementation phases of the government-owned banks' restructuring project.
The meeting discussed progress made in reviewing and updating the two banks' internal regulations to align them with governance requirements, as well as assessing the status of the two banks' foreign branches and ways to develop and link them to the central management.
The meeting addressed updating data on credit, deposits, and clean assets, as well as implementing a comprehensive banking system across an increasing number of branches. It also reviewed the banks' capital increase plans, studied the status of investments, and evaluated their financial feasibility.
The meeting also addressed the legal aspects of the restructuring process and the proposed amendments to the internal regulations to ensure their consistency with applicable banking laws and regulations.
Minister Sami emphasized the need to accelerate the pace of work and implement requirements according to the specified timetables, noting that the restructuring of government banks represents a pivotal step toward developing the banking sector and enhancing its efficiency. She called for continued coordination between the two banks and the consulting body to ensure the completion of the institutional and administrative transformation requirements.
The two banks' foreign branches are on the table. Taif Sami holds a meeting to follow up on the restructuring of Rafidain and Rashid.
On Wednesday, May 21, 2025, Finance Minister Taif Sami held a meeting with management from Rafidain and Rashid Banks and representatives from Ernst & Young, a consulting firm, to follow up on the implementation phases of the government-owned bank restructuring project and discuss updating data on credit, deposits, and clean assets.
A statement by the Iraqi Ministry of Finance, a copy of which was received by Al-Jabal, stated that “the meeting, chaired by Finance Minister Taif Sami, and attended by the managements of Rafidain and Rashid Banks and representatives of Ernst & Young Consulting, discussed the progress made in reviewing and updating the internal regulations of the two banks in line with governance requirements, in addition to evaluating the conditions of the banks’ foreign branches and ways to develop and link them to the central administration. It also addressed updating credit, deposit and clean assets data and implementing the comprehensive banking system in an increasing number of branches, in addition to reviewing plans to increase the capital of the two banks and studying the reality of investments and evaluating their financial feasibility.”
The statement added, "The meeting also addressed the legal aspects of the restructuring process and the proposed amendments to the internal regulations to ensure their consistency with applicable banking laws and regulations."
According to the statement, the Minister of Finance stressed "the need to accelerate the pace of work and implement requirements according to the specified timetables," noting that "the restructuring of government banks represents a pivotal step toward developing the banking sector and raising its efficiency."
Sami called for "continued coordination between the two banks and the consulting body to ensure the completion of the requirements for institutional and administrative transformation," according to the statement.
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Minister of Environment: Carbon projects will provide additional income for Iraq and attract international investments.
Environment Minister Helo Al-Askari confirmed on Wednesday that carbon projects will provide additional income for Iraq and attract significant international investments.
“Iraq faces major environmental challenges, including rising temperatures, low rainfall, water scarcity, and declining water levels in rivers and water bodies. This has led to a significant decline in biodiversity and an increase in desertification, which has resulted in the displacement of a number of villagers and rural residents in some areas to other areas, which will cause future problems for the receiving regions in terms of social, political, environmental, and economic aspects,” the Minister of Environment said during the first international conference on carbon economics, which was followed by Al-Masry.
The Minister of Environment explained that "these factors have prompted the Iraqi government to pay attention to the environmental file and related issues. One of the most notable achievements of the government of Prime Minister Mohammed Shia al-Sudani is the establishment of the General Company for Carbon Economics within the Ministry of Environment." He indicated that "this company not only works to issue carbon bonds, but also seeks to implement environmental improvement projects to preserve Iraq's environment."
The Minister affirmed that “Iraq is witnessing an urban, political, economic and social renaissance, and the features of an environmental renaissance have begun to appear, in accordance with the Prime Minister’s directives to maximize and diversify the financial revenues of all ministries. Our ministry, through the efforts of all, has been able to establish the General Company for Carbon Economics and work with relevant national and international bodies to attract international companies to the country for investment, which will contribute to securing an additional source of income for Iraq.”
He pointed out that "the ministry has achieved a major accomplishment through the General Company for Carbon Economics, attracting the interest of international companies, including the global specialist company Olefin, which has pledged to invest £2 billion in the first phase of the project."
Barzani's agreements in Washington: America hints at the gas issue, while Baghdad rejects it.
Near East Division of the Foreign Ministry
The statements and counter-statements surrounding the signing of new oil and gas agreements with American companies during Kurdistan Region President Masrour Barzani’s visit to Washington do not appear to be abating. After Baghdad expressed its reservations, the region’s Ministry of Natural Resources responded that the matter was merely a development of old agreements concluded over the past years. However, this quickly became a source of debate in parliamentary circles and attracted attention outside Iraq. The latest to intervene was the US State Department’s Near Eastern Affairs Department , which described the agreements on Wednesday as partnerships that will boost gas production in Iraq. This is a phrase often used by US officials to urge Iraq to become “self-sufficient” and not rely on Iranian gas, which has been a contentious issue between Baghdad, Washington, and Tehran for years.
The US Department of State's Near Eastern Affairs Directorate, in a post on the X platform said:
We are pleased to see trade relations between the United States and the Kurdistan Region of Iraq expanding with the signing of agreements with American companies.
This type of partnership will boost gas production in Iraq and benefit our two peoples.
Iraq and France Discuss Boosting Economic Ties
Iraq's Minister of Trade, Dr. Atheer Daoud Al-Ghurairi, met on Tuesday with French Ambassador to Baghdad, Patrick Durel, to explore ways of enhancing bilateral cooperation, particularly in the economic and investment sectors.
Al-Ghurairi emphasised Iraq's commitment to creating an attractive investment environment and highlighted the country's promising opportunities across various sectors. He invited French companies to participate in a "Made in France" exhibition in Iraq and proposed a joint forum for Iraqi and French private sectors to present investment projects and explore partnerships.
The two officials also discussed strengthening cooperation in trade, agriculture, and healthcare.
Ambassador Durel praised Iraq's ongoing economic reforms aimed at improving the business climate. He formally invited Minister Al-Ghurairi to visit France to deepen coordination and expand areas of cooperation.
Both sides agreed to continue joint efforts to broaden business engagements and reinforce economic and commercial relations for the mutual benefit of the two countries.
APIKUR Spokesperson: Gas Development Will Benefit All Iraqis
In the coming years, the opportunities for developing gas fields will expand, Caggins said, adding that this will benefit all the people of Iraq.
The Association of the Petroleum Industry of Kurdistan (APIKUR) welcomed the recent gas development agreements signed between the Kurdistan Regional Government (KRG) and two major American energy firms—HKN Energy and Western Zagros—emphasizing that expanding the region’s gas sector will deliver benefits for all Iraqis.
“Iraq has a shortfall in gas and electricity,” APIKUR spokesperson Col. Myles B. Caggins III told Kurdistan24. “That’s why producing more gas in the country is good for everyone.”
The remarks followed the formal signing of two major energy agreements on Monday, in Washington, D.C., during a special event hosted at the U.S. Chamber of Commerce as part of Prime Minister Masrour Barzani’s official visit to the United States.
Under PM Barzani’s supervision, the KRG signed deals with HKN Energy and Western Zagros for the development of key oil and gas fields in the Kurdistan Region. The combined value of the agreements exceeds $10 billion and is expected to significantly strengthen the energy sector and contribute to the Kurdistan Region’s broader economic transformation.
Energy Expansion to Accelerate in Coming Years
APIKUR stressed that these deals represent more than economic contracts—they are long-term investments in Iraq’s future.
In the coming years, the opportunities for developing gas fields will expand, Caggins said, adding that this will benefit all the people of Iraq.
He noted that finalizing such strategic agreements is a major success for the citizens of the Kurdistan Region and of Iraq as a whole.
Washington Ceremony Reflects Growing U.S.–Kurdistan Energy Ties
The participation of Prime Minister Barzani and senior officials in the signing ceremony highlights the growing significance of U.S.–Kurdistan energy cooperation. The agreements aim to address Iraq’s energy shortages while boosting regional investment, creating jobs, and diversifying sources of revenue for the KRG.
With global energy demand rising and Iraq facing persistent challenges in electricity and gas supply, the deals are seen as a breakthrough that could position the Kurdistan Region as a key player in meeting both national and international energy needs.
Erbil International Fair: A Vital Platform for Attracting Investors
The 15th Erbil International Construction, Electricity, and Energy Exhibition is a key meeting point for investors and owners of industrial and commercial companies from inside and outside Iraq, reflecting the vitality of the industrial and commercial sector in the region and the country as a whole. The exhibition, which will run for several days, features more than 250 local, Arab, and foreign companies specializing in construction, equipment, and building materials, providing a great opportunity to exchange expertise and establish new partnerships that enhance investment opportunities and economic development.
The exhibition's general manager, Kuran Saad Abdullah, told Al-Sabah that the local government in the Kurdistan Region attaches great importance to the exhibition and is working in coordination with relevant government ministries and directorates to support its activities. The exhibition has attracted wide participation from 16 Arab and foreign countries, including 34 specialized Chinese companies, which reinforces the exhibition's importance as a regional and international center for trade and industry.
The exhibition provides an integrated platform that brings together specialists in the fields of infrastructure, housing, and various investment projects. Participating companies showcase the latest products, services, and advanced technologies that meet the demands of the local and regional markets.
Abdullah pointed out that the exhibition's activities include a global trade conference, which will include extensive discussions on opportunities and challenges in the industrial and investment sectors, with the attendance of senior government officials, diplomats, and relevant authorities. He explained that entry to the exhibition is limited to companies, investors, and specialized visitors via a barcode system, and will be open from 10:00 a.m. to 7:00 p.m. The exhibition will continue until tomorrow, Friday, allowing those interested in building business relationships and strengthening their presence in the market.
US Secretary of State: Kurdish autonomy and prosperity are central to our policy toward Iraq. We are concerned about the influence of Iran and
"militias."
US Secretary of State Marco Rubio responded to US Representative Joe Wilson's concerns about Iranian interference in energy agreements concluded by the Kurdistan Regional Government with US companies, while noting that US policy toward Iraq is "Kurdish autonomy and economic prosperity."
Wilson expressed his "concern" in response to the Kurdistan Regional Government's signing of two agreements with American companies, saying, "Baghdad is exercising its control, and in this context, Iran is interfering and trying to prevent these agreements, which aim to strengthen Kurdistan's freedom and enable the regional government to support its people."
In a hearing held today in the US Senate, the US Secretary of State commented on these "concerns," emphasizing "the United States' support for the region's autonomy and the need to respect economic agreements."
The US Secretary of State explained, "The core of his country's approach to Iraq is ensuring the autonomy enjoyed by the Kurds in that part of the country, and a key part of that is allowing them to secure an economic lifeline that will enable them to prosper."
Rubio added that "Iraqi officials in Baghdad have expressed interest in establishing a closer and better relationship with the United States," stressing that "the US administration has made clear to these officials the importance of respecting American companies operating in Iraq, as well as respecting Kurdish independence."
Regarding Iranian influence, the US Secretary of State expressed his country's "concern," saying, "Unfortunately, Iranian influence continues to grow in some sectors of the elected Iraqi government. This poses a serious threat from the United States' perspective, including through pro-Iranian Shiite militias that have carried out attacks against US interests in the past and have indicated their intention to do so again in the future. This is unacceptable and must be addressed."
The Iraqi economy is facing a storm, and the IMF is ringing the final bell.
Economic experts have called on the Iraqi government to take a very serious approach to the International Monetary Fund's (IMF) report, after the latest Article IV consultations highlighted the fragility of Iraq's economic structure and warned of a rapidly escalating financial crisis that could plunge the country into an irreversible crisis.
The report, issued on May 20, 2025, confirmed that the Iraqi economy is on an extremely dangerous path, due to the inflation of operating expenses, which exceed 60% of the total general budget, and the absence of any effective structural reform in revenue policy. Meanwhile, the government continues to rely on oil revenues for approximately 92% of its revenues, despite the continued decline in oil prices and the volatility of the global market.
The IMF recommended controlling the bloated wage bill, which alone consumes more than half of annual revenues. The IMF believes that the policy of haphazard hiring and the approach of appeasing political blocs with job grades are pushing Iraq's finances to the brink of collapse, according to economic analyst Ziyad al-Hashemi.
Al-Hashemi said that the IMF's report forecasts a drop in the average price of Iraqi oil to $65 per barrel by 2025, which will widen the deficit gap, which could exceed 7.5 trillion dinars if spending policies continue without review. Meanwhile, the actual deficit in the 2024 budget exceeds 4.2% of GDP, according to official data included in the report.
The government has so far ignored a direct response to the IMF's recommendations, while some voices close to it have been content to downplay the report's impact, describing its contents as a "conservative and unrealistic interpretation." This recalls similar reactions to similar reports issued in 2016 and 2019, which were met with similar denials from previous governments.
These warnings preceded a wave of financial collapses in Iraq in the middle of the last decade, when the country experienced a stifling liquidity crisis that prompted the Ministry of Finance to delay the disbursement of employee salaries in 2015. This coincided with the price of oil falling below $40 per barrel, a scenario that could recur if current policies remain unchanged.
This situation coincided with internal warnings issued by Iraqi economic experts, including former government financial advisor Mazhar Mohammed Salih, who repeatedly pointed to the "lack of political will to change the rules of the financial game." He argued that the structural deficit cannot be resolved with painkillers, but rather through tax reform and increased national non-oil production.
This wave of warnings coincides with worrying social indicators, most notably the rise in the unemployment rate to 17%, according to the Central Bureau of Statistics, and the expansion of poverty to more than 25% in some southern governorates. This reflects the direct relationship between economic deterioration and administrative inefficiency, which Baghdad continues to be unable to seriously address.
This complex landscape has resulted in a sharp decline in foreign investor confidence. Data from the Ministry of Planning revealed a 38% decline in the number of investment projects registered in the first quarter of 2025 compared to the same period last year, a rate that portends a gradual withdrawal of capital from the Iraqi market.
Al-Hashemi said that the current government's leadership has also entered an election campaign and is not expected to take action to address the major economic imbalances. However, it may issue urgent statements downplaying the IMF statement and reassuring the public that financial matters are comfortable and under control, with nothing to worry about. This means that these problems will be deferred, as they are, to the next government rather than being resolved.
2025 Budget: Government Advisor Outlines Spending Priorities and Plans to Address Trillion-Dollar Deficit
In a press statement, Salih confirmed that "Iraq was able to sell its oil until the end of the first quarter of 2025 at an average price of $75 per barrel, which exceeds the price specified in the general budget law of $70."
He pointed to the paradox witnessed by the global oil market, as the OPEC+ group recently lifted its restrictions on member states' production, driven by a decline in global oil inventories. However, this increase coincided with the escalation of the trade war between the United States and China, and the subsequent imposition of customs tariffs, which produced signs of a recession in the global economy.
Salih explained that a 1% decline in economic growth leads to a half-percent decline in demand for crude oil and vice versa, noting that this has created a "downward oil asset cycle."
Regarding the Iraqi general budget for the rest of 2025, Salih indicated that it will operate according to the principle of "fiscal space," which is based on flexibility in controlling public expenditures. He emphasized that priority in spending will be given to government salaries and wages, pensions, and social welfare, which affect the lives of eight million Iraqis. He also stressed the need to continue Spending on infrastructure projects remains uninterrupted, as they are linked to the government's development and reform agenda.
Saleh noted that the budget includes a hypothetical maximum borrowing limit of 64 trillion Iraqi dinars (about $1.5 trillion) to cover the deficit gap, out of an upper ceiling of 200 trillion dinars. He emphasized that the Ministry of Finance will borrow to finance the project when needed.
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Big News for Iraq’s Future: Permanent World Bank Office in the Works! 💼
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