To spur investment, parliamentary demands to expedite the release of the 2025 budget schedules.
Member of Parliament Thaer Makhif confirmed that there are demands and intense debate within parliamentary circles regarding the necessity of releasing the 2025 budget schedules as soon as possible due to reasons related to investment projects and their suspension in most governorates.
The video for this My FX Buddies Blogpost is below here:
Makhif told the Iraq Observer, "Although the budget was approved for three years, two years of which were distributed among the ministries, one year, the 2025 budget, has not yet been released, and the disbursement mechanism has not been determined."
He added, "Finance Minister Taif Sami has begun to hint that there is no money, and this has angered the House of Representatives because many projects are stalled." He pointed out that "among the stalled projects are two in Najaf Governorate affiliated with the Ministry of Water Resources, which were referred to contractors and have not yet begun work on them."
He continued, "The representatives are keen to release the 2025 budget schedules and distribute these funds to ensure the sustainability and completion of stalled projects, especially since only a short period remains in the current government's term." He stressed the need to invest time optimally in the service of citizens and to keep the wheel of investment in the country turning, primarily.
It's worth noting that the Ministry of Finance has completed the preparation of the budget tables following the Prime Minister's approval. It is in the process of submitting them to the Council of Ministers for discussion and any necessary amendments. They will then be returned to the Ministry of Finance for referral to the House of Representatives.
The House of Representatives is expected to discuss the tables after the Eid al-Adha holiday, where a session will be held to ratify them. The Finance Committee will record its observations on the figures included in the tables, which are in line with the Iraqi government's projected revenues for 2025, which do not exceed 150 trillion dinars, instead of the exaggerated figures of previous years, which ranged between 200 and 211 trillion dinars, of which only 156 trillion dinars were spent last year.
The Central Bank Governor sponsors a workshop on the strategy to increase bank lending.
His Excellency the Governor thanked GIZ for its efforts to develop and support the lending strategy.
It is worth noting that the Central Bank of Iraq launched the National Strategy for Bank Lending in Iraq for the period 2024-2029 in May 2024, which was prepared in cooperation with the German Agency for Development Cooperation.
Media Office
June 4, 2025
Advisor to the Prime Minister: The value of Iraq's natural resources exceeds $16 trillion
The Prime Minister's financial advisor, Mazhar Mohammed Salih, confirmed on Wednesday that Iraq is moving towards diversifying its GDP sources by expanding investment in the mining sector. He noted that the value of Iraq's natural resources exceeds $16 trillion.
Saleh told the Iraqi News Agency (INA): "Iraq is moving towards diversifying its GDP sources by expanding investment in the mining sector, a sector that has been neglected for decades. The government has signed memoranda of understanding with reputable international companies in the fields of mineral exploration and investment, particularly in phosphate, sulfur, lithium, and copper fields. This is within the framework of the strategic directions of the Iraqi government's program to diversify sources of national income and optimally utilize the country's resources." He added, "Investment in the mining sector will contribute to attracting billions of dollars in fields ripe for development, such as sulfur, phosphate, lithium, and other minerals." He pointed out that "Iraq ranks first in the world in terms of the concentration of natural resources per square kilometer, and ninth globally in the value of various natural resources, with an estimated value exceeding $16 trillion, according to published global estimates." He explained that "the various reserves of land wealth constitute a diverse stock of minerals, foremost among which is phosphate: its reserves are estimated at more than 10 billion tons, and our country ranks second globally in terms of reserves, and is concentrated in the Akashat region of Anbar Governorate. Second is free sulfur: our country enjoys large reserves in Mishraq in Nineveh Governorate, which are among the largest free sulfur fields in the world. Third is silica: in the Najaf region and western Iraq, it is used in the glass, electronics, and semiconductor industries, and is among the most important and purest reserves in the world, according to published international estimates." He continued, "Likewise, iron, manganese, copper, and gold are distributed across various regions of Iraq, particularly in the Kurdistan Region and the western and central borders, except for southern Iraq, which possesses vast reserves of other rare natural resources."
He pointed out that "the policy of diversifying the national economy by extracting and processing mineral resources for national industries, and then adopting their export by maximizing value-added chains in manufacturing or semi-manufacturing industries, will add at least 10 percent to the GDP in the first phase."
He pointed out that "after that, the percentage will increase to become one of the pillars of diversifying national income sources over time, especially if the link between mineral investment and the development of national manufacturing industries grows, such as fertilizer, aluminum, glass, electronics, and batteries related to renewable energy. This is in addition to the introduction of foreign capital and advanced digital technology and services, the provision of national job opportunities, and investment in Iraqis as a productive national resource." He emphasized that "the mineral diversification policy is one of the opportunities to implement the philosophy of sustainable development and free the national economy from the extreme monopoly of oil resources. It is considered an economic defense against the monopoly of oil prices, which directly impacts the state budget."
He emphasized that "present and future generations will witness a new era of investment for Iraq in economic and technological progress and prosperity, towards building a promising model of balanced development." He noted that "Iraq, which strongly aspires to build investments in mining fields as an additional resource in the medium and long term, does not rule out investment in oil fields, but it cannot completely replace oil in the near term. Rather, it serves as an important complement to the strategy of diversifying the national economy."
He concluded by saying: "The mining sector represents a promising opportunity for Iraq, not only to increase public financial revenues, but also to restore the structural balance of the Iraqi economy, create major national employment opportunities, and achieve diversified development in areas rich in natural resources, which will lead to increased investments in infrastructure, within a model of geographically balanced economic development for all of Iraq."
Warnings of pressure on the Iraqi budget if oil prices collapse
: Energy expert Yahya Al-Aqabi said that Iraq is expected to increase its crude oil production to approximately 4.11 million barrels per day by the end of July 2025, following OPEC+'s decision to increase production by 411,000 barrels per day starting that month. This increase includes countries including Saudi Arabia and Iraq.Al-Aqabi added in a statement to the "Jarida Platform" that "this increase could put negative pressure on oil prices, especially in light of the slowdown in global economic growth and the increase in supplies from outside OPEC, which could push prices down to between $55 and $60 per barrel during the second half of the year."
He added, "If prices stabilize, increased production will lead to increased oil revenues, which will help reduce the fiscal deficit and enhance the government's ability to finance projects."
Al-Aqabi warned that "if prices fall significantly, this will negatively impact oil revenues and the general budget."
He pointed out that "there is also the potential for higher prices due to limited increases in production, heightened geopolitical tensions, and declining global inventories, particularly in the United States, which is in Iraq's interest in terms of financial returns."
Al-Aqabi concluded by pointing out that "Iraq may face pressure to adhere to production quotas, especially in light of previous reports of exceeding quotas, which could lead to tensions within OPEC."
The Central Bank directs banks not to suspend their work except by a decision from the Federal Government
The Central Bank of Iraq directed banks and financial institutions not to suspend their work except by a decision from the federal government, not by holidays granted by local governments.
Shafaq News Agency obtained a document signed by the acting deputy governor, Ammar Hamad Khalaf, and addressed to all authorized banks and non-banking financial institutions, which stated: “Based on Board of Directors Resolution No. (105) of 2025, it was decided that you (the general administration and branches) are committed to the official holidays determined exclusively by the federal government, in order to ensure the smooth flow of banking and financial services provided to citizens, and due to the nature of the connection between the work of various financial institutions and the work of this bank.”
Under this decision, all banks and financial institutions must adhere to official working hours when there is a holiday granted by the local governments in Baghdad and other provinces.
The Central Bank signs a training agreement with the British Council.
The Central Bank of Iraq announced today, Wednesday, the signing of a training agreement with the British Council.
Al-Yenk said in a statement followed by Al-Masry, “Under the patronage of the Governor of the Central Bank of Iraq, Ali Mohsen Al-Alaq, the Central Bank of Iraq signed a training cooperation agreement between the bank and the British Council, in the presence of the British Ambassador to Iraq, Irfan Siddiq. The agreement was signed on behalf of the Central Bank by the Director of the Human Resources Affairs Directorate, Falah Salim, and on the British side by the Director of the British Council, Ben Luton, and the Country Director of the British Council.”
He pointed out that "this agreement comes within the framework of enhancing joint cooperation between the two parties, aiming to develop the capabilities of Central Bank of Iraq employees in the field of the English language, through organizing specialized training courses in cooperation with the British Council, which contributes to raising linguistic proficiency and enhancing professional communication at the regional and international levels."
The Liquidity Problem: Between the Central Bank's Response and the Effects of the Rent Model
Dr. Haitham Hamid Mutlaq Al-Mansour
Macroeconomic policy faces a liquidity and financing problem that directly impacts various aspects of economic and living life. The roots of this problem lie in accumulated structural imbalances that make it difficult to achieve sustainable financial stability. The declining capacity of the productive base has limited the accumulation of fixed capital and the contribution of real non-oil sector output, favoring near-total reliance on oil revenues, which constitute more than 90% of state revenues, to pay for imports.
Because Iraq's traditional economic equilibrium cycle is virtually non-existent, liquidity management will be constrained by oil revenues. This situation makes the general budget's performance vulnerable to the shocks of fluctuating global oil prices, causing immediate financial crises manifested in the difficulty of financing projects and delayed payments for operational expenditures.
In the face of this challenge, the Central Bank's efforts to address it stand out through steps to reform the banking system and enhance banks' ability to manage liquidity by promoting financial inclusion, increasing banking sector productivity, creating a healthy competitive environment, and strengthening the banking system's ability to address risks.
To sustainably address the liquidity and financing shortages at the strategic level, real technical reforms and an investment-attractive climate are required. The future of liquidity, therefore, depends on the ability of macroeconomic policy to unshackle rents, implement radical reforms in financial management, stimulate productive sectors, and direct spending.
Therefore, the liquidity shortage represents a complex phenomenon that goes beyond a temporary shortage of liquidity. It reflects deep structural imbalances in the financial and monetary structure, which requires an analysis that explores its structural roots, as follows:
The expansion of government spending in multiple directions, the most dangerous of which is the continued and clearly flabby employment within government institutions, and the failure to control, rationalize, and discipline spending within the constraints of basic budget items. This requires a genuine boost to private sector growth and freeing it from the "crowding-out effect."
The rentier nature of the economy, its overwhelming reliance on rentier revenues in the general budget, and the limited diversification of revenue sources outside this sector have reinforced the budget's dependence on fluctuating revenues from this sector, leading to a persistent government deficit.
The banking system's reduced flexibility in stimulating savings and deposits, which in turn reduces the ability of Iraqi banks to absorb liquidity from individuals in the form of deposits and savings.
The limited stability of the investment environment due to bureaucracy and legal gaps discourages investors from investing in important sectors, particularly infrastructure projects, which can generate external savings for investment activity, increase real GDP growth rates, and raise the level of fixed capital formation.
Implications of the growth of the informal economy: The informal economy is estimated to represent approximately 34% of GDP in the parallel currency market, controlling approximately 40% of dollar transactions. This increases the leakage of liquidity outside the formal economy's income cycle, which is targeted by budget allocations.
Iraq's 2023 budget amounted to approximately 198.9 trillion dinars, with a deficit of 65 trillion dinars, while the 2024 budget reached 211.8 trillion dinars, with a deficit of 84 trillion dinars. The 2025 budget was allocated due to the decline in global oil prices. Iraq exports approximately 100 million barrels of oil per month, and its price fluctuates, ranging between $68 and $72 last year. During the first 11 months of 2024, oil revenues amounted to 119 trillion dinars, at a monthly rate of approximately 10 trillion dinars, which was used to cover operating expenses. This exacerbated the growing government deficit, which is reflected in limited liquidity to cover budget expenditures, leading to an increase in government debt as the deficit grows.
It can be concluded from the above that technical measures, despite their importance and rapid response in the monetary and financial sectors to address the liquidity problem, remain limited as a long-term strategy for sustainable financing unless they are accompanied by deep, gradual reforms in the financial and real sectors that address the roots of the structural crisis and create a new formulation for the development financing approach. This approach works to develop a path for generating added value for the non-oil GDP and planning policies to develop this sector, increasing its productivity and exports while reducing imports by the same percentage.
The future of long-term development financing in Iraq depends on the economic system's ability to recover from a "rentier model" to a "diversification model."
June 5 2025 Iraqi News
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Economist: Expanding bank transfers contributed to the decline in the dollar's price
Abdul Rahman Al-Mashhadani, an expert in economic and financial affairs, confirmed on Thursday that the recent decline in the dollar exchange rate in the Iraqi market is due to purely internal reasons, ruling out that external developments or tensions, such as the possibility of an armed conflict between India and Pakistan, would have any direct impact on the financial situation in Iraq.
Al-Mashhadani explained in a statement to the Al-Maalouma Agency, that “geopolitical tensions usually lead to an increase in global demand for the dollar, but the decline in the price we are witnessing in Iraq confirms that the drivers are internal and not external.”
He explained that "one of the most prominent of these factors are the recent instructions issued by the Central Bank regarding the regulation of real estate buying and selling operations. It has been customary for sellers to obtain the largest part of the property value in dollars, even if the prices are announced in dinars, which previously increased demand for hard currency. The new decision, however, has reduced this pressure."
He added that "the increase in the number of banks authorized to conduct financial transfers through the balance enhancement mechanism contributed, in turn, to reducing the exchange rate, as the Central Bank's daily dollar sales exceeded the $300 million barrier. However, a large portion of these amounts were not actually used in import operations, but remained deposited in external bank accounts, in what is known as the "return" phenomenon, which led to a decline in the real local demand for the dollar."
Al-Sudani: Industry is the cornerstone of economic recovery.
Prime Minister Mohammed Shia Al-Sudani stressed: "Industry is the main pillar of economic recovery, which contributes to achieving sustainable development."
Al-Sudani said in a speech at the National Industry Day celebration at the headquarters of the Iraqi Federation of Industries: "Iraqi industrialists have proven their ability to innovate and face challenges."
The Prime Minister added: "After 2003, our country witnessed an ill-considered openness that reached the point of dumping and halted industry."
He continued: "Our industry today has entered the area of self-sufficiency, and for the first time, the government has imposed sovereign guarantees for private sector projects, and we did not hesitate to issue any decision to protect the national product."
He stressed: "The private sector is a partner in facing challenges, and the Council of Ministers is ready to take decisions that go beyond product protection decisions, including preventing the import of competing materials. "
He said that the private sector is a partner in facing challenges, indicating that more than 34,000 industrial projects are covered by the guarantee.
He added that Iraq is an oil, industrial and agricultural country, pointing out that there is a challenge in the lack of control over ports, which has contributed to the entry of cheap goods that have affected local products.
The Prime Minister continued: We aim to transform our oil exports into high-value derivatives by creating an important and in-demand petrochemical oil industry for export.
Al-Maliki stresses the importance of dialogue to resolve differences between Baghdad and Erbil.
State of Law Coalition leader Nouri al-Maliki stressed on Thursday the need to address all outstanding issues between Baghdad and Erbil through dialogue.
Rafidain Bank is preparing to distribute Eid gifts to more than 50,000 of its most engaged users.
Rafidain Bank is preparing to distribute Eid gifts to more than 50,000 customers who are the most engaged in using electronic cards to save and shop instead of using cash.
Your Eidiya is on us... Rafidain Bank is preparing to distribute Eidiya to more than 50,000 customers, the most engaged users of electronic cards for saving and shopping instead of cash.
In a qualitative step aimed at supporting the culture of electronic payment and encouraging citizens to abandon traditional cash transactions,
Rafidain Bank is launching the "Your Eidiya is on Us" campaign to coincide with Eid al-Adha. The campaign includes cash rewards for thousands of customers who use their e-cards for purchases.
This initiative aligns with the Prime Minister's directives urging banks and payment companies to develop effective incentive mechanisms that contribute to accelerating the transition to a cashless digital economy and fostering a culture of savings and the smart use of modern banking tools.
The bank plans to distribute Eidiya gifts to more than 50,000 active customers using electronic cards, according to a structured regulatory system that adopts precise standards of fairness and transparency.
Rafidain Bank... Towards a digital society and banking services worthy of citizens' trust.
Rafidain Bank
Media Office
Hidden fingers are tampering with the relationship between Baghdad and Erbil... Efforts to abort Al-Sudani's second term before it matures -
Political researcher Nabil Al-Azzawi revealed on Wednesday (June 4, 2025) that there are political parties working behind the scenes to stir up tensions and disputes between Prime Minister Mohammed Shia Al-Sudani and the Kurdish forces in Kurdistan, in an attempt to block the renewal of his term for a second term.
Al-Azzawi told Baghdad Today, "There are political parties that do not want the elections scheduled for November 11 to take place, and they are seeking by all means to place artificial obstacles in the way of the government." He pointed out that "these parties are working to undermine the growing trust between al-Sudani and the Kurdish forces, as they believe that an understanding between the two parties strengthens al-Sudani's chances of remaining in office for a second term."
He added, "Since assuming office, the Prime Minister has placed the relationship between Baghdad and Erbil at the top of his priorities. His first move was toward the Kurdistan Region, where he launched the 'Sustainable Solutions' initiative as an alternative to the policy of recurring crises. This has worried some forces that do not see a solution to these issues in their best interest."
Al-Azzawi explained that "Al-Sudani is making clear strides toward removing the outstanding issues," noting that "an expanded technical meeting is expected to be held in Baghdad, with the attendance of an official delegation from the region, to discuss a number of outstanding issues, including the push for the enactment of an oil and gas law, which would end many crises and open the door to radical solutions regarding the disputed areas and Article 140 of the constitution."
The political researcher emphasized that "leaving these issues unresolved threatens the political stability Iraq currently enjoys, especially in light of the complex regional circumstances," asserting that "inciting conflicts at this time only serves narrow agendas, while citizens today need services and development, not escalation and conflict."
Al-Azzawi pointed out that "there are multiple internal parties, some of them from within the Coordination Framework, seeking to obstruct al-Sudani's rapprochement with the Kurds, due to their awareness that the support of Kurdish and Sunni forces puts him in a strong position to secure a second term, something these parties do not desire, as they are working to shuffle the political cards to preserve their own interests."
Observers believe that since assuming the premiership in October 2022, Prime Minister Mohammed Shia al-Sudani has sought to adopt a comprehensive de-escalation policy and prioritize dialogue to resolve outstanding issues, particularly between the federal government in Baghdad and the Kurdistan Regional Government.
His first official visit was to Erbil, a clear indication of his desire to open a new page with the region.
During his tenure, Al-Sudani focused on thorny issues such as the oil and gas law, disputed territories, and the implementation of Article 140 of the constitution. These issues have been a source of tension between the two sides for years.
As the local elections approach and talk escalates about the possibility of renewing al-Sudani's term for a second term, a counter-political movement has begun to emerge, seeking to undermine this process by re-escalating tensions with the region and raising contentious issues as part of the power struggle between political forces within and outside the Coordination Framework.
Abu Raghif: National roaming is one of the most important tools for digital inclusion.
Chairman of the Communications and Media Commission, Nofal Abu Raghif, affirmed on Wednesday that national roaming is one of the most important tools for digital inclusion and stimulating the market environment towards innovation and integration. He pointed out that this step enhances the effectiveness of operators and accelerates the launch of the fourth national company's services.
A statement by the Communications and Media Commission, followed by Al-Masry, stated that “a qualitative and detailed technical meeting was held, headed by Dr. Nofal Abu Raghif, and attended by officials and representatives of mobile phone companies in Iraq and the specialized technical teams in the Commission, to discuss the executive steps for national roaming and the activation of the Non-Disclosure Agreement (NDA), within the framework of the Commission’s efforts to establish the rules of fair competition and develop the communications infrastructure.”
He added that "during the meeting, the interim regulatory framework for the national roaming application was discussed, ensuring the expansion of geographic coverage and enabling citizens to access telecommunications services through operators, by adopting a fair and transparent mechanism that guarantees the rights of all and prevents any exclusionary or monopolistic practices."
Abu Raghif emphasized that "national roaming is one of the most important tools for digital inclusion and stimulating the market environment toward innovation and integration." He pointed out that this step enhances the effectiveness of operators and accelerates the launch of the fourth national company's services, within regulatory frameworks that maintain balance among operators.
The Authority's Chairman commended the responsible and fruitful engagement demonstrated by mobile phone companies during the meeting, commending the spirit of cooperation it witnessed, and noting the importance of professional openness as an indicator of the sector's readiness to move to an advanced stage.
The discussion also focused on activating the NDA agreement as a legal and professional umbrella that preserves the confidentiality of technical and commercial data during coordination and exchange processes, and constitutes a real guarantee of intellectual property to build partnerships based on trust and institutional integrity.
The Authority emphasized that these measures do not aim to weaken the role of any existing companies, but rather represent a transition to a more equitable stage of competition that serves the national interest and helps improve services and reduce costs for consumers.
At the conclusion of the meeting, the Authority affirmed its full commitment to following up on the implementation of national roaming mechanisms according to a clear timetable, within balanced usage and distribution ratios, and in continuous coordination with all partners to ensure regulatory compliance and achieve the reform objectives of the telecommunications sector.
Cryptocurrency Economics
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Cryptocurrency is a modern economic phenomenon that first appeared in 2009 under the name (Bitcoin), and other types were invented that reached more than (2000) cryptocurrencies, then it gained great momentum recently due to the US administration’s adoption of this type of currency, and as a result its value is now estimated at about (2.70) trillion dollars.
This cryptocurrency is unique in that it is outside the control of central banks, as it is not included in the "currency issued" by those banks, nor is it even outside the control of governments. However, it is a popular market for speculators, who generate significant financial returns from it, and it is not without risks, of course.
Money is generally sought for three purposes: transactions, speculation, and hedging. The first is its exchange value, as it is exchanged for goods and services and to meet obligations such as debt. The second is used by speculators to generate financial profits. The third is its role as a store of value, as individuals and institutions seek it to mitigate future risks. Therefore, a country's central bank controls the money supply to control inflation rates by regulating prices.
Herein lies the challenge. The fact that this currency is outside the control of central banks means that there is cash out of control. Consequently, monetary policy will face challenges in its ability to control inflation rates. The challenge is even greater in the economies of developing and underdeveloped countries.
An important point to note is that if the demand for cryptocurrency is for the purpose of speculation and hedging, which is the most prominent form currently, then the severity of these risks will be reduced, unlike demand for transactional purposes, because goods and services will be immune from the waves of high demand. This keeps inflation rates within acceptable limits to some extent. However, the nature of this cryptocurrency, given that its market is not subject to the usual controls, keeps the risk present.
The statement by Counselor Prof. Dr. Mazhar Mohammed Saleh regarding the Central Bank of Iraq's intention to issue a digital currency has sparked considerable public confusion. The concept has been interpreted as referring to the currency as being similar to the aforementioned cryptocurrencies. This is incorrect and not intended. Rather, it is an alternative to the established paper currency, and as such, it will be subject to the same controls as paper currency. This step, however, is currently difficult given the current energy crisis, weak internet connectivity, and weak digital literacy.
Therefore, cryptocurrencies remain a challenge facing the Iraqi economy, especially since speculation in them has become a reality in Iraq, according to some reports.
Launch of Canada-Kurdistan-Iraq Business Council
During the launch of the Canada-Kurdistan-Iraq Business Council in Erbil, the Chairman of the National Investment Commission (NIC), Dr. Haider Muhammad Makiyya, underscored the importance of expanding economic partnerships as a foundation for stable national economies.
Dr. Makiya revealed that Iraq had attracted over $90 billion in investment over the past two years, including $64.6 billion in foreign investment and $25.3 billion from domestic sources. He attributed this to Iraq's deliberate economic openness and the NIC's focus on building a productive and sustainable investment environment through collaboration with local and international partners.
He emphasised the pivotal role of the private sector in driving this transformation, alongside the ongoing reforms aimed at improving Iraq's investment climate.
In a meeting with Dr. Mohammed Shukri, Chairman of the Kurdistan Region Board of Investment, Dr. Makiyya called for stronger integration between the federal and regional investment commissions. He noted that such coordination would enhance Iraq's unified investment map and contribute to balanced economic development across the country
Welcoming the launch of the new economic council, Dr. Makiya described it as a qualitative leap in Iraq-Canada relations and expressed hope for a similar initiative to be established in Baghdad soon.
He concluded by inviting Canadian investors and companies from the Kurdistan Region to participate in the Iraq Investment Forum, scheduled for mid-June in Baghdad. The forum will showcase major investment opportunities and foster future partnerships.
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