Iraq anticipates an economic crisis… What solutions are being proposed?
The Iraqi street is witnessing a state of anticipation, following the statement by outgoing Prime Minister Mohammed Shia al-Sudani about the new Iraqi government being forced to borrow, as a result of the deficit the country is facing in the federal general budget. This raises concerns among economic observers that Iraq is entering an economic crisis that may directly affect employee salaries and purchasing power.
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Iraq, and the local market in general, are facing a worsening economic crisis and a noticeable decline in purchasing power, amid expectations of a “bad” economic situation that Iraqis may face in the coming period, which has prompted specialists and businessmen to propose a number of solutions to get out of these complex crises.
In this context, Basim Mohammed, a businessman and economic expert, told Roj News , “The austerity policy is largely due to the government’s performance. It was supposed to be limited to employees’ salaries without granting additional incentives and bonuses, in addition to reviewing high salaries, especially in some ministries such as the Ministry of Oil, where some salaries reach 30 million dinars per month.”
He adds that “the Iraqi economy suffers from a clear structural imbalance, as the contribution of local industry does not exceed 10 percent, compared to 90 percent that depends on imports, which leads to money leaving the country,” noting that “importing cars alone costs the Iraqi treasury about $12 billion annually.”
Mohammed proposes several solutions, including removing zeros from the Iraqi currency to strengthen it, while warning against raising the exchange rate to 200,000 dinars, arguing that this would weaken the national currency. He also stressed the need to diversify income sources and not rely solely on oil, noting that even oil-producing countries do not depend on it as their only source of revenue.
These warnings come at a time when Iraq is experiencing a volatile economic situation, after the current year passed without the budget being approved, amid talk of the internal debt rising to about 90 trillion dinars due to the financial deficit.
According to official data, the value of salaries, after the appointments launched by the Sudanese government, amounted to more than 60 trillion dinars, according to what was announced by the Finance Committee in 2023, while the Sudanese indicated in a televised meeting at the end of last March that the salaries for the year 2024 amounted to 90 trillion dinars out of 156 trillion dinars that were spent from the budget of 213 trillion dinars.
In the same context, the Central Bank of Iraq recently announced that the internal public debt has risen to 87 trillion and 748 billion dinars, an increase of 5.35% compared to 2024, and 19.59% compared to 2023, according to statistics for last June.
Iraq has suffered from repeated financial crises in recent years, including delays in salary payments, which has raised questions about financial liquidity, in addition to the economy being affected by fluctuations in global oil prices.
or his part, Mahmoud Abu Asal, a commercial market owner, told Roj News , “The market is very weak, especially after the elections, when it was supposed to improve, but things are going downhill,” noting that “citizens are now shopping at a rate not exceeding 10 percent compared to before.”
Abu Asal attributes this decline to “the general economic conditions and instability,” stressing that “traders are now reducing their purchases of goods due to weak demand.”
According to experts, investments in Iraq are concentrated on building residential complexes, in contrast to the absence of industrial and operational projects that provide job opportunities for young people, at a time when oil companies still rely on foreign labor despite being legally obligated to employ Iraqi workers.
For some time now, Iraqi markets have been experiencing a general recession, which was clearly reflected during the past holiday seasons, as purchasing activity in Baghdad markets declined compared to previous years, as a result of the unstable economic and political conditions.
December 25th 2025
The Ministry of Finance announces the completion of the electronic network linking project between the Accounting and Budget Departments.
The Ministry of Finance announced today, Thursday, the completion of the integrated electronic network linking project between the Accounting and Budget Departments.
According to a statement from the ministry received by “Al-Eqtisad News”, “This strategic step comes within the framework of the ministry’s commitment to promoting digital transformation and automating government procedures, in line with the Sustainable Development Goals.”
The ministry explained that “this achievement came as a result of fruitful cooperation between the computer departments in the two departments, in cooperation with the Information Technology Department. This resulted in the activation of a unified electronic system that allows for the immediate and accurate viewing and auditing of financial transfer books and amounts of addition and deduction, reflecting the ministry’s commitment to transparency and efficiency.”
The Ministry of Finance affirmed that “this measure will directly contribute to achieving several objectives, including: the electronic exchange of data related to allocations, funding, and actual expenditures, thus enhancing the speed and accuracy of decision-making. It will also eliminate paper transactions and reduce manual effort, contributing to resource optimization and improving the work environment. Furthermore, it will minimize human error and accelerate the pace of work, thereby enhancing the reliability of financial data. In addition, it will strengthen the accuracy of oversight procedures and improve the efficiency of financial performance, supporting good governance.”
Sudanese: The need to reconsider the economic situation to avoid a financial deficit
- Prime Minister Mohammed Shia Al-Sudani explained on Thursday that supporting the industrial, agricultural, commercial and tourism sectors is the basis for improving the economic situation.
The Prime Minister’s Media Office stated in a statement seen by (Shafaqna Iraq) that “Prime Minister Mohammed Shia Al-Sudani met with a group of tribal sheikhs and dignitaries from Al-Dujail district in Salah Al-Din Governorate.”
During the meeting, Al-Sudani stressed that “the districts of Balad and Dujail are among the districts that have made sacrifices in the past and present.”
He pointed to the spirit of brotherhood that unites the sons of the Iraqi spectrum in the province.
Terrorism is being pursued in the caves
He explained that “the security services have the readiness, capability and efficiency. There is no foothold for terrorists in Iraq and they are being hunted down in caves, mountains and deserts.”
The Prime Minister pointed to the role of the tribes in maintaining brotherhood and communication and addressing the remnants of terrorism and the resulting displacement.
He explained that “the victory over terrorism, sedition and hate speech was achieved by the people’s stand against the alien ideology.”
He pointed out that “the district of Dujail has a special status because of the sacrifices it made and its honorable stand against the dictatorial regime, which makes it deserving of care and attention from the state.”
The government has focused on providing services in a manner befitting this country, its capabilities and status, and on working to alleviate the suffering of citizens and improve the economic and living conditions.
Al-Sudani added, “The government of services is not a slogan or a title, but rather a work methodology and a tireless movement from Basra to Mosul.”
He affirmed that a significant portion of the government program's priorities had been achieved, while progress continued on development and service projects . Service projects were launched in the districts of Balad and Dujail, and work on others was being monitored, with directives issued to finalize procedures for new projects to begin implementation.
Sudanese: The need to reconsider the economic situation to avoid a financial deficit
He stressed the need to reconsider the economic situation to avoid a budget deficit in light of increased expenditures and stagnant revenues. He emphasized the importance of genuine reforms to overcome challenges and prevent Iraq from becoming solely dependent on oil, arguing that stimulating other sectors would generate revenue and address unemployment and job creation issues.
The Prime Minister stated that “there is a heavy legacy spanning four decades that squandered resources and consumed time in the adventures of wars and conflicts.”
He pointed out that “the government has worked during the past three years according to a clear vision and will, and with the support of national forces.
Expressing his confidence in the people's ability to face challenges and move towards a country with a strong economy where citizens enjoy social justice and a decent life.
He emphasized at the end of his speech that implementing the government's vision requires sustainable security and stability, which can be achieved through the community standing with the security services.
The coordination framework postpones the nomination of a prime minister candidate until after the election of the Speaker of Parliament and the President of the Republic.
The Coordination Framework revealed today, Thursday (December 25, 2025), its vision for the timing of choosing its candidate for Prime Minister, stressing that it is still too early to talk about this issue, and that the priority at the present stage is to complete the first constitutional requirements.
Mahmoud Al-Hayani, a leader in the framework, told Baghdad Today that “talking about choosing the new prime minister is still too early, and the available constitutional period is still long and does not require rushing to put forward names or to decide this entitlement at the present time.”
Al-Hayani explained that "the political process is proceeding according to constitutional procedures, and the political blocs still have ample time before embarking on the file of selecting the Prime Minister, and the priority at the present stage is to complete the first constitutional requirements."
He added that "the selection of the prime minister candidate will be made after the election of the Speaker of Parliament and then the election of the President of the Republic, as these are two essential steps that precede the constitutional appointment of the head of government."
Al-Hayani stressed that "the coordination framework is dealing with this file in a spirit of responsibility and consensus, away from media pressure or political haste, and any decision regarding the next candidate will be based on national understandings and the country's higher interest."
The constitutional process in Iraq, since 2003, has stipulated a hierarchical structure beginning with the election of the Speaker of Parliament and his two deputies, followed by the election of the President of the Republic within Parliament. The President then tasks the nominee of the largest parliamentary bloc with forming the government. Throughout successive parliamentary sessions, the selection of the Prime Minister has become a central point of agreement among the Shiite political forces represented within the Coordination Framework, alongside broader negotiations among other political blocs regarding the formation of alliances and the distribution of positions within the executive and legislative branches before the name of the new Prime Minister is finalized.
Savaya will visit Baghdad early next month.
Iraqi political and governmental sources reported on Thursday (December 25, 2025) that the US Special Envoy to Iraq, Mark Savaya, will arrive in Baghdad in the first half of January, carrying messages from the US administration to the leaders of the ruling coalition regarding the future of political and security relations between the two countries and the issue of restricting weapons to the state.
Savaya's visit, his first since taking office last October, will be dedicated to conveying the American position without interfering in decision-making, according to a government source.
This comes amid continued political disagreement over presidential positions in parliament, government and republic more than a month and a half after the legislative elections.
A source within the coordination framework indicated in a press statement followed by "Baghdad Today" that "the visit aims to clarify Washington's position on Iraq, stressing its rejection of continued security and political cooperation if the state continues to act as a duality with armed factions."
Savaya has important ties with Prime Minister Mohammed Shia al-Sudani, and they previously cooperated on the case of the kidnapped Israeli Elizabeth Tsurkov.
Last week, Savaya had stated that the intentions of some Iraqi factions towards disarmament were "not enough," stressing the need for disarmament to be comprehensive and binding within a clear national framework.
Policy factors shape recent dollar movement against dinar
The US dollar has risen against the Iraqi dinar in local markets since the start of December, movements that do not affect overall price stability, a senior official told Shafaq News on Thursday.
Prime Minister’s financial and economic adviser Mudhhir Saleh said the Iraqi economy has maintained a low inflation rate of around 2.5% annually, attributing this to the interaction of three effective economic policies.
He explained that the first is monetary policy, which relies on a fixed official exchange rate for the Iraqi dinar against the dollar at 1,320 dinars per dollar, providing a stable nominal anchor for prices.
The second is fiscal policy, which applies broad-based subsidies amounting to nearly 13% of gross domestic product, helping cushion the transmission of price shocks to living standards, particularly for basic goods and services.
The third pillar, according to Saleh, is trade policy focused on price defense, pointing to the expansion of modern retail markets, such as hypermarkets, which act as a counterweight to exchange rate volatility by absorbing what he described as distorted information in the parallel market and neutralizing its impact on prices and consumption.
He stressed that the parallel exchange market no longer has a significant influence on daily living conditions, noting that it has effectively become detached from income and consumption levels, with its impact shifting instead to the asset sector, which is not directly linked to everyday economic stability.
Meanwhile, economists warned earlier that Iraq’s currency pressures are rooted in structural vulnerabilities, including heavy reliance on oil revenues, weak non-oil income, and long-standing fiscal and administrative challenges.
The Central Bank of Syria sets the beginning of next year as the date for starting the currency exchange.
The Governor of the Central Bank of Syria, Abdul Qader Hasriya, has set the beginning of next year as the date for the start of replacing the old currency with a new one, according to what was published on his official Facebook page on Thursday.
The governor wrote, "January 1, 2026 is the date for the start of the replacement process. The executive regulations will be issued."
A presidential decree related to the issuance of the new Syrian currency granted the Central Bank powers "to determine the deadlines for exchange and its centers," according to what the governor published, confirming that executive instructions and an explanation of the mechanisms will be issued at a press conference to be held next Sunday.
In August, the governor revealed that his country intends to replace the banknotes in circulation with new ones that remove two zeros from them, explaining that six new denominations will be printed from various sources.
Improving the exchange rate of the Syrian pound is one of the most prominent financial challenges in Syria after the overthrow of ousted President Bashar al-Assad on December 8.
Before the outbreak of the conflict in 2011, the dollar was worth about fifty liras, before the currency gradually collapsed and lost more than ninety percent of its value.
Syrians are forced to carry large amounts of banknotes in their bags or plastic bags to meet their needs. The 5,000 Syrian pound note is currently the highest denomination in circulation.
According to the governor, the central bank intends to print six new denominations, explaining that for logistical reasons and to meet demand, the printing will be done at two or three sources.
Following the outbreak of the conflict and under the economic sanctions imposed on the previous regime, Syrian banknotes were printed exclusively in Russia, which was an ally of Assad and to which he turned as opposition factions advanced on Damascus late last year.
The exchange rate has recently fluctuated between 10,000 and 11,000 against the dollar, whereas it hovered around 15,000 in the months preceding Assad's downfall.
Iranian Ambassador: Iran received large sums of money from the Sudanese government
The Iranian ambassador to Iraq, Mohammad Kazem Al-Sadegh, stated that Iran received very large sums of money in the government of Mohammad Shia Al-Sudani, more than it had received in previous governments .
Sadiq said in a televised interview followed by Al-Sa’a Network, “Iraq is paying off its outstanding debts, and these payments are framed, forcing Iran to deal with them as humanitarian or food supplies, or within the framework of paying off some debts.”
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The dream of revolutionary change in Iraq
If a referendum were held in Iraq today, we would find that many Iraqis support "radical solutions" that might come through a military coup or foreign military intervention, because there is a general feeling that it is difficult to change the negative conditions through the institutional and democratic mechanisms currently in place .
This mood, in fact, is what was behind the acceptance of radical transformations at various points in Iraqi history, at least since the coup of Bakr Sidqi in 1936, which is considered the first military coup in the entire Arab region .
With every coup or violent upheaval, emotions surge, many are optimistic, but the emotional fervor quickly fades, leaving behind a reality far worse and more complex than before. But will the Iraqi people ever learn ?
After every disaster, a large percentage of citizens tend to interpret the violent transformation as not being good, and that we need another "transition" that is good, rather than rejecting the idea of violent transformation, coups, and revolutions altogether .
Many have been waiting, at least since the beginning of this year which is nearing its end, for those crushing blows that the United States of America will direct at the militias in Iraq, as if the Iraqi militias were merely an isolated body, and not a network of forces, interests and influence, intertwined with security and military policies, in a way that makes it difficult to separate them from the body of the state itself .
What if America assassinated the “fifty names” list circulating on social media, and bombed militia camps and their weapons depots in one dark night? Would Iraq be okay the next morning ?!
Many reports confirm that the first reaction to such a hypothetical event will be chaos on various levels, not least in the security file, in addition to the disruption of the map of power and the balance of pressure between them, which will motivate adversaries to try to fill the void quickly, creating a new circle of conflicts .
Calm and stability will not be achieved quickly after this scenario, for many reasons, including that the authority of the state is incomplete, and that the ability to enforce the law in the street is clearly lacking, especially with the infiltration of many militia figures, or those loyal to the militias, into state institutions, outside the organizational structure of the militias themselves .
America, up to this point, is not concerned with withdrawing security powers from groups operating under the umbrella of the Popular Mobilization Forces, which are spread across areas north and west of Baghdad, and manage vast areas of the shared borders with Syria and Jordan, in cooperation with the army, the federal police, and the counter-terrorism service .
This deployment is not merely a routine distribution of units, but reflects a perception built since after 2015 of the Iraqi security doctrine, where factions are no longer just a supporting force, but a partner in security decision-making .
In the vicinity of the capital, specifically to its north and west, the Popular Mobilization Forces (PMF) control areas such as Tarmiya and Abu Ghraib, which have historically been gateways for security threats and are now under heavy security control by these factions. This presence effectively makes the PMF the de facto controller of security at Baghdad's entrances and exits, an influence that extends beyond the military dimension to the political and strategic spheres .
In the west, specifically on the border strip with Syria and Jordan, the Popular Mobilization Forces not only perform the traditional border guard duties, but also dominate vast areas of the desert .
Although this deployment is carried out under the protocol of the Joint Operations Command, and in cooperation with the army, the federal police and the counter-terrorism service, the reality on the ground imposes a kind of “division of roles”; while the army and police hold the city centers and official ports, the Popular Mobilization Forces take on the task of holding the ground in the rugged and open areas, enjoying great operational independence .
The current approach to bringing about change in Iraq is to continue pressuring the militias and their political fronts to force them to implement change. The desired outcome may not be immediate, nor may it fulfill all the "revolutionary aspirations" of a large segment of Iraqis in their vision of change, but this is the picture as it appears today .
Bank cards in Iraq: Protection mechanisms are slower than the pace of fraud.
With the rapid expansion of bank card use in Iraq, legislation, protection mechanisms, and compensation practices - in the event of theft or hacking of these cards - remain much slower than the pace of fraud and hacking, with citizens paying the price for the loopholes while banks stand by as mere spectators.
Almost every month, the story repeats itself with different details, but it ends with the same loss. A citizen goes to the ATM to withdraw part of his salary or savings, only to find that the balance has shrunk or disappeared after a series of withdrawal and transfer transactions that he did not make. He then goes to the bank looking for an explanation or compensation, only to be met with a ready answer: the bank is not responsible, and the mistake lies with the cardholder.
An explosion in the number of cards and a weakness in security
Banking sector data shows that the number of electronic cards operating in Iraq has exceeded tens of millions in recent years, with the expansion of programs to localize the salaries of employees and retirees, and linking broad segments of citizens to payment, salary, shopping and cash withdrawal cards.
The annual increase in the number of cards and the volume of electronic payments has exceeded 20 percent in some reports, which means that society is indeed moving from paper transactions to digital transactions in daily life, from salary to bills and purchases from stores.
This expansion has not been matched by a similar level of development in the technical and regulatory infrastructure. Communication networks, ATM systems, mobile applications, point-of-sale devices, and the environments in which private payment companies operate still suffer from multiple shortcomings, some of which are directly technical, and some of which are related to weak internal controls and oversight of employees and workflow.
With every loophole, the almost constant rule remains that the loss falls first on the citizen, and then on the public's confidence in the banking system as a whole.
How are bank cards stolen?
Fraud patterns targeting bank card holders in Iraq are no longer limited to a rudimentary call from an unknown number.
Experts and security agencies speak of a graduated series of methods. At the first level, there are text messages and links that reach citizens' phones bearing the logos of banks and payment companies, requesting data updates, card activation, or the installation of a new application. Once the information is clicked or entered, the data is transferred to an unknown party that carries out withdrawal and transfer operations within minutes.
On another level, fake apps appear on mobile app stores bearing the names of local banks or international companies. Citizens use these apps, believing they are dealing with an official entity, and enter their complete banking information into an interface designed to serve fraudsters. This is compounded by the use of unsecured shopping websites or point-of-sale (POS) terminals lacking security standards, which can be reprogrammed or fitted with small devices that record card data as it is swiped.
Iraqi security agencies have previously announced the dismantling of networks specializing in stealing the salaries of retirees and employees after systematically hacking their cards, sometimes through small, repeated operations that the account holder only discovers after they have accumulated.
In other cases, complaints have emerged from gas station owners and traders whose Mastercard and business cards were hacked , resulting in significant losses in some governorates.
The picture painted by these events is that hacking is no longer a passing event, but an ongoing activity that is evolving from an individual crime to an organized operation.
From stealing an individual's salary to billions of dollars in loopholes
Behind these everyday stories, there is another, more dangerous level, related to the use of Iraqi cards to exploit loopholes in the dollar transfer system.
International and press reports over the past two years have spoken of a significant jump in the volume of cross-border transactions via Visa and Mastercard cards issued from Iraq, and of the widespread use of prepaid cards purchased within the country, then smuggled to other countries to withdraw dollars from exchange offices there, before recycling the money in the Iraqi market to take advantage of the price difference between the official rate and the parallel market.
These operations prompted the Central Bank of Iraq to impose strict limits on card transfers outside Iraq, reduce usage limits, decrease the number of card issuers, and contract with specialized entities to monitor suspicious transactions.
But the clear message from these facts is that a weak protection system not only harms individuals, but also opens the door to significant financial exploitation that puts pressure on the stability of the monetary system and fiscal policy.
The citizen pays the price for the loopholes while the banks stand idly by.
In the midst of this scene, banking expert Nasser Al-Kinani puts his finger on a point he considers the most dangerous.
He says in his speech that “what is striking in most cases of hacking is the withdrawal of money from citizens’ accounts without their knowledge, only for the victim to be surprised later by the bank’s refusal to compensate him or even bear part of the responsibility, on the pretext that the mistake lies with the user, and this statement is not in line with internationally approved banking standards.”
Al-Kinani explains that bank card hacking operations are carried out today through more than one route, “from electronic fraud messages that reach citizens in the form of fake links, to applications that impersonate banks and payment companies, passing through the use of unsafe shopping sites or point-of-sale devices that do not meet protection standards.”
He then adds that the problem does not stop at the citizen’s behavior, but extends to the structure that is supposed to protect him, explaining that “the weakness of the cybersecurity infrastructure, the absence of early warning systems and monitoring of suspicious operations, as well as the limited verification procedures, are all factors that contribute to the spread of these financial crimes.”
The direct message that Al-Kinani wants to convey is that holding the citizen solely responsible for what is happening, and hiding behind the phrase “do not share your data,” does not absolve banks of their legal and professional duty to protect systems and funds, and is not consistent with what sound banking systems apply when similar fraud operations occur.
Banks: Between Paper Warnings and Actual Responsibility
Most banks and payment companies in Iraq frequently publish warnings to their customers via SMS and social media, asking them not to share their PIN, verification code, or card details with any party, and confirming that they do not request this information by phone or through social media pages.
However, these warnings are often accompanied by explicit legal statements that hold the customer fully responsible for any damage resulting from “misuse of the card” or “sharing data with third parties.”
From the bank's perspective, this provision offers protection against potential lawsuits. From the customer's perspective, it simply means that the path to compensation is virtually closed even before the crime occurs.
The biggest problem is that this formula ignores fundamental questions: Does the bank actually apply the highest possible technical protection standards? Are there real systems in place to monitor and stop unusual transactions before they are completed? Is the customer immediately notified when a strange pattern appears in their card transactions?
Legal and banking experts argue that a bank's responsibility is not entirely extinguished simply because a customer has signed the terms of service. The bank is contractually obligated to provide the safest possible environment and is also legally obligated to ensure the protection of its systems and customer data.
When there are technical gaps, deficiencies in warning systems, or laxity in dealing with suspicious activities, protection shifts from a “shared responsibility” to a burden placed entirely on the weaker party.
Loopholes in legislation and oversight that doesn't address the details
The banking laws in force in Iraq and the tools for combating money laundering and terrorist financing provide a general framework for banks’ obligations to monitor operations, verify sources of funds, and report unusual activities, but they do not yet provide a clear and detailed picture of how to deal with cases of electronic fraud targeting individuals, nor of compensation mechanisms, nor of the limits of responsibility of each party in the electronic payment chain, from the bank to the payment company to the merchant to the cardholder.
In practice, this means that victims' complaints get caught up between the central bank, banks, the judiciary, and security agencies, without a unified and quick process to determine whether the loss resulted from a customer's mistake, a bank's negligence, or a gap in the protection system that must be fixed and for which the victims should be compensated.
Digital transformation and fraud risks
In conclusion, Nasser Al-Kinani warns that if this problem continues without radical solutions, it will not remain merely a matter of individual complaints, but will turn into a real obstacle to the financial inclusion and digital transformation projects that the government and the central bank are talking about.
He says that “the continued hacking of accounts and cards, with the absence of a clear compensation mechanism, will push a large segment of citizens to refrain from electronic transactions and return to cash, and this means disrupting the goal of linking the economy to the banking system more broadly.”
He emphasizes a set of steps that he considers urgent and necessary, starting with “obligating banks to bear their legal responsibilities and compensate those affected after investigation and technical audit in each case,” passing through “tightening the Central Bank’s control over private payment companies and approved protection systems, updating cybersecurity infrastructure, and building early warning systems to monitor suspicious transactions,” and not ending with “launching continuous, clear and simple awareness campaigns that explain to citizens modern methods of fraud and how to protect their data, with a focus on the most targeted segments such as retirees and those with local salaries.”
The banking expert concludes his remarks with a statement he considers to be the crux of the matter: “Protecting citizens’ money is not an option, but a legal and professional obligation. A reliable banking system cannot be built in a country where the citizen alone bears the consequences of technical and administrative shortcomings. If banks want to gain people’s trust, they must first prove that they are capable of protecting them when they are harmed.”
Savaya will visit Baghdad early next month.
Iraqi political and governmental sources reported on Thursday (December 25, 2025) that the US Special Envoy to Iraq, Mark Savaya, will arrive in Baghdad in the first half of January, carrying messages from the US administration to the leaders of the ruling coalition regarding the future of political and security relations between the two countries and the issue of restricting weapons to the state.
Savaya's visit, his first since taking office last October, will be dedicated to conveying the American position without interfering in decision-making, according to a government source.
This comes amid continued political disagreement over presidential positions in parliament, government and republic more than a month and a half after the legislative elections.
A source within the coordination framework indicated in a press statement followed by "Baghdad Today" that "the visit aims to clarify Washington's position on Iraq, stressing its rejection of continued security and political cooperation if the state continues to act as a duality with armed factions."
Savaya has important ties with Prime Minister Mohammed Shia al-Sudani, and they previously cooperated on the case of the kidnapped Israeli Elizabeth Tsurkov.
Last week, Savaya had stated that the intentions of some Iraqi factions towards disarmament were "not enough," stressing the need for disarmament to be comprehensive and binding within a clear national framework.
Iran is looking for an Iraqi prime minister who can balance the interests of Baghdad and Tehran.
The Iranian ambassador to Iraq, Mohammad Kazem Al-Sadegh, stated that Iran is looking forward to an Iraqi prime minister who takes Iran's interests into account .
Sadiq said in a televised interview followed by Al-Sa’a Network, “Whoever enters political work is a politician, whether classified as part of the resistance or Shiite parties. In the end, every country, whether Iran or others, looks for its own interests and the interests of the country it is linked to. There are mutual and common interests, and we hope that any prime minister who comes will look at the interests of his country and the interests of the neighbor .”
He added that "Iran has established a foreign policy based on neighboring countries, and we give Iraq priority due to our proximity, long shared borders, and the cultural, social, and historical overlap between the two countries."
Muzhir Muhammad Salih: Current revenues are sufficient to cover salaries and the basic needs of the state.
The Prime Minister's Financial Advisor, Mazhar Muhammad Salih, confirmed on Friday that current public revenues cover the state's basic needs, primarily salaries. He also indicated that the government is moving towards controlling spending and maximizing non-oil revenues to achieve financial sustainability.
Salih told the official news agency that "current public revenues cover the state's basic needs, primarily salaries, pensions, and social welfare expenditures, which total approximately eight trillion dinars per month."
He explained that "these obligations, despite their importance and being a top priority that must be paid, constitute only a portion of the overall financial burden. Other obligations must be paid, including public debt servicing, outstanding arrears, and expenses for managing vital logistical aspects within the operational budget, in addition to spending on investment projects related to essential services."
He added, “Fiscal sustainability necessitates controlling public spending, reviewing and auditing it according to spending efficiency standards and priorities, while simultaneously maximizing non-oil revenues. This ensures that all required expenditures are met in a stable and sustainable manner, independent of the cyclical fluctuations in oil revenues.”
He emphasized that “the recent Cabinet decision establishes a new phase in fiscal policy management, known as the concept of fiscal consolidation. This approach aims to gradually reduce the fiscal deficit in the short term and solidify fiscal discipline in the long term, in addition to developing a phased strategy to reduce the public debt balance.” He pointed out that “this path is a fundamental pillar for achieving the principles of fiscal sustainability and strengthening the resilience of public finances, thus ensuring the state’s ability to meet its social and economic obligations while maintaining the overall stability of the national economy.”
In a first-of-its-kind move, customs announces the success of the first fully integrated international crossing.
The General Authority of Customs announced today, Thursday, that it received transit trucks subject to the International Transport System (TIR) carried on roll-on/roll-off (RORO) ships at the port of Umm Qasr, in a step that is the first of its kind within the transit routes that pass through Iraqi territory.
The authority stated in a statement followed by “Iraq Observer”, that “the operation comes within the efforts to activate the international TIR agreement and enhance Iraq’s capabilities in managing multimodal transport operations, in line with the state’s plans to develop the transit sector and expand regional and international trade routes.”
The authority added in its statement that “after completing the necessary customs procedures, the trucks continued their overland journey towards Turkey and Syria, coming from the ports of the United Arab Emirates, in an indication of the readiness of the infrastructure of Iraqi ports and their ability to receive and operate advanced logistical transport patterns.”
The authority confirmed that the integration of the RORO transport mechanism with the TIR system achieves a number of operational and economic benefits, including accelerating transit movement, reducing handling time, lowering costs for transport and trading companies, as well as raising the levels of efficiency and safety in the transport of goods.
She pointed out that “this type of operation contributes to maximizing revenues, stimulating the national economy, and revitalizing transit traffic through Iraq.”
Iraq: A new financial achievement that enhances oversight and transparency in public finance management.
The Ministry of Finance announced today, Thursday, a qualitative achievement in the field of financial auditing, which contributes to enhancing the reliability of data and supporting digital transformation .
The ministry stated in a statement received by Al-Sa’a Network that “the Unified Treasury Account Division in the Accounting Department announced a qualitative achievement in the field of auditing and data reconciliation, through the implementation of cross-referencing and analysis of data submitted by government banks and spending units, with the aim of verifying its integrity and accuracy, and revealing cases of duplication, conflict or non-conformity .”
She added that "this measure contributes to raising the level of reliability of financial data, and enhancing prior and subsequent control over the movement of bank accounts, which supports the efficiency of public money management and reduces financial risks ."
She added that "this development represents an important step in supporting the state's directions towards digital transformation in public finance management, and achieving the highest levels of transparency and financial discipline ."
She pointed out that "this achievement comes within the preparations for the third phase of the project to unify the electronic platforms for bank accounts, and within the framework of the unified treasury account project, which aims to enhance institutional work and technical integration in financial aspects
CBI Says China and India Account for Half of Iraq's Foreign Trade
The Central Bank of Iraq (CBI) announced on Thursday that trade with China and India now accounts for approximately 50 percent of the country’s total foreign trade.
In a statement, the CBI said Iraq’s trade volume with China reached $58.035 billion last year, while trade with India amounted to $31.102 billion.
Türkiye was also among Iraq’s key trading partners, with bilateral trade valued at $20.786 billion. The United States followed with $8.952 billion, while trade with South Korea stood at $7.661 billion and the United Arab Emirates at $5.307 billion.
Greece recorded trade worth $4.599 billion with Iraq, while Saudi Arabia ranked next with $2.771 billion.
The figures highlight Iraq’s growing economic ties with Asian markets, particularly China and India, which together dominate the country’s external trade.
Smart drilling systems from China boost efficiency at Iraqi oilfields
"Iraqi oilfield operations have become smarter and more efficient thanks to China's advanced drilling technologies," said Hussein Mohammed, an Iraqi engineer who has worked alongside Chinese technicians on maintaining high-end drilling equipment developed by a Chinese company at an oilfield in southeastern Iraq.
At the Maysan Oilfield's maintenance workshop, where China Oilfield Services Iraq branch serves as the main service provider, the high-end drilling system Xuanji was disassembled into three sections on instrument racks, with testing data continuously scrolling on nearby computer screens.
Developed independently by China Oilfield Services in 2014, the Xuanji system broke a technological monopoly long held by a few European and United States companies in high-end drilling. It was introduced into Iraq's oilfield development operations in 2020.
An Haiyang, general manager of the company's Iraq branch, said the system integrates two cutting-edge technologies: rotary steerable drilling and logging-while-drilling.
"Rotary steerable drilling provides stronger power for equipment while significantly improving operational safety," An said.
"Logging-while-drilling acts like an eye at the bottom-hole assembly, enabling precise drill bit control as it navigates rock layers thousands of meters underground to locate oil-bearing formations accurately."
The system has drilled a cumulative 85,000 meters in Iraq, with total downhole operation time exceeding 21,000 hours.
China Oilfield Services has also deployed the Xuanyue system, which lowers precision instruments into wells via cables and uses acoustic, electrical and nuclear magnetic resonance technologies to map the distribution, reserves and quality of oil and gas reservoirs, making resources deep underground "visible".
The system has completed more than 5,000 logging operations in Iraq, contributing to increased reserves and production, An said.
Engineer Mohammed said, "A series of advanced Chinese technologies, represented by the Xuanji and Xuanyue systems, have been successively applied in Iraq, injecting new momentum into China-Iraq energy cooperation, promoting the optimization and upgrading of Iraq's energy industry, and enhancing oilfield exploration and development capabilities."
Uzbekistan and Iraq Discuss Expanding Trade and Economic Cooperation
During a working visit to the Republic of Iraq, Shohruh Gulamov, Deputy Minister of Investment, Industry and Trade (MIIT) of Uzbekistan, held a series of bilateral meetings with the heads of key state bodies and business structures of Iraq and took part in the Uzbekistan–Iraq Business Forum in Baghdad.
In talks with Juma Al-Bahadli, Deputy Minister of Industry and Mineral Resources; Ghassan Hamid, Deputy Minister of Trade for Economic Affairs; Salar Muhammad Amin, Deputy Chairman of the National Investment Commission; Adil Al-Aqqab, Head of the Iraqi Industrialists’ Union; and Ibrahim Al-Baghdadi, Chairman of the Economic Council of Iraq, the sides discussed ways to expand trade and economic cooperation.
The discussions covered measures to remove trade and regulatory barriers, optimise tariffs on priority Uzbek goods, speed up certification procedures, and develop logistics based on regional transport hubs.
Particular focus was given to prospects for increasing the export of construction materials, textiles, carpets, food products and jewellery, as well as enabling Uzbek companies to enter the Iraqi market.
Speaking at the business forum, organised with the support of the Embassy of Uzbekistan in Iraq and the Economic Council of Iraq, Shohruh Gulamov emphasised that trade is a priority for deepening economic partnership and highlighted the significant untapped potential of bilateral trade.
Cooperation opportunities in industry and mineral resources were also discussed, including the establishment of joint ventures, raw material processing, supplies of refined metals, and engineering services and equipment.
The forum brought together more than 150 representatives of Iraqi state bodies and businesses, as well as 25 leading Uzbek companies from the food, textile, pharmaceutical, electrical engineering, furniture and construction materials sectors. Participants were familiarised with Uzbekistan’s investment climate and export potential, while B2B meetings and an exhibition of Uzbek products were held on the sidelines.
Following the visit, the Iraqi side was invited to consider holding the first meeting of the Uzbekistan–Iraq Joint Economic Committee and the next business forum in Uzbekistan.
Iraq launches a direct shipping line with the UAE and receives its first ship from Port Rashid.
The General Company for Iraqi Ports revealed on Thursday the opening of the maritime route with the UAE, while noting the arrival of the first ship coming from Rashid Port .
According to a statement from the company received by Al-Sa’a Network, “Today, a direct international shipping line was opened linking Rashid Port in the UAE with Umm Qasr Port, with the arrival of the first shipment of (Ro-Ro) transport vehicles to the port, in a step aimed at enhancing trade and reducing maritime transit time .”
He added that "the line was inaugurated in the presence of the Assistant Director General for Technical Affairs at the General Company for Iraqi Ports, Abdul Sada Khalaf, representing the Director General of the company, Farhan Al-Fartousi, and a number of department directors in the company, in addition to representatives of supporting ministries and bodies ."
According to the statement, the Assistant Director General for Technical Affairs at the company said, “The new line operates with a crossing time not exceeding (36) hours, and with a capacity of up to (145) accompanying trailers on each trip .”
He explained that “the arrival of the first shipment of (Ro-Ro) vehicles via this line represents the beginning of a new phase in the development of maritime transport services in the port of Umm Qasr, and provides a direct and fast option for transporting goods with driver accompaniment, thus reducing reliance on land transport .”
He explained that "the line is not limited to serving the Iraqi market, but also opens a logistical corridor linking Iraq to neighboring countries, including Jordan, Syria and Turkey, through existing land transport networks, which enhances Iraq's position as a regional transit hub ."
He pointed out that "the company completed the operational and technical arrangements at Umm Qasr port some time ago to ensure the smooth handling of (Ro-Ro) shipments," noting that "the line will support bilateral trade between Iraq and the UAE, and raise the efficiency of supply chains in the region ."
It is worth noting that the launch of the line comes within a broader trend by the General Company for Iraqi Ports to adopt more efficient and sustainable maritime transport solutions that contribute to reducing costs and limiting emissions compared to traditional means of transport. The company had previously announced that it would continue to work on developing its infrastructure and expanding its maritime services
Iraq’s economy in 2025: Oil dominance and delayed reforms
Iraq’s economy followed a complex trajectory in 2025, marked by strong oil revenues alongside persistent structural weaknesses, uneven progress across productive sectors, and delays in long-awaited reforms.
Oil remained the backbone of public finances, continuing to shape economic decision-making as the government sought to balance fiscal stability with growing domestic and external pressures. Economic management throughout the year reflected a close overlap between political and economic considerations, limiting policy flexibility in areas such as energy, salaries, and international partnerships.
Oil and Gas: Major Contracts and Sensitive Shifts
The oil sector dominated economic activity in 2025, amid global price volatility and Iraq’s production commitments under the OPEC+ alliance, a group of major oil-producing countries that coordinates output levels.
The year began on a positive note. On January 20, the Midlnad Oil Company announced, in cooperation with China’s EBS, a major oil discovery in the southern part of the East Baghdad field, estimated at around two billion barrels.
Pressure soon followed. On March 28, Iraq proposed cutting spending by international oil companies operating in the country by 30 percent after a sharp drop in global prices, while maintaining production levels.
Mid-year developments included the signing of a memorandum of principles to develop the Hamrin oil field with US-based HKN Energy, the launch of construction works for the Nineveh refinery with a capacity of 70,000 barrels per day, and a contract with US firm Schlumberger to develop the Akkas gas field, raising output to 100 million standard cubic feet per day.
In September, Iraq signed a joint operating agreement for the Gas Growth Integrated Project (GGIP) at the Artawi field in Basra with TotalEnergies and QatarEnergy. The project was described by officials as one of the country’s most significant integrated oil, gas, and clean energy initiatives. During the same period, crude oil exports through the Kurdistan Region pipeline to Türkiye resumed for the first time in more than two and a half years.
On October 4, the Oil Ministry signed a contract with US-based Excelerate Energy to implement a floating liquefied natural gas (LNG) platform in Basra. Under the agreement, Excelerate will supply Iraq with its first floating storage and regasification unit, scheduled for delivery on November 2.
The ministry also announced the activation of a contract with BP to develop four major oil fields in Kirkuk — Baba and Avana, Jambur, Bai Hassan, and Khabbaz — alongside the rehabilitation of North Gas Company facilities to boost gas production.
The sector faced setbacks as well. Russia’s Lukoil declared force majeure at the West Qurna-2 oil field due to US sanctions, prompting Baghdad to later invite American oil companies to manage the field.
In a notable development, Iraq announced on November 4 that it had halted imports of gasoline, diesel, and kerosene after achieving self-sufficiency. The move paved the way for Iraq to become an exporter of refined petroleum products, a goal that had been delayed for years.
On December 1, the Oil Ministry issued direct invitations to several major US oil companies to enter negotiations and submit technical and commercial bids to compete for managing West Qurna-2.
Electricity and Energy: Missed Opportunities
Despite limited progress in regional electricity interconnection, including an agreement signed in April to double power imports from Turkiye from 300 to 600 megawatts, Iraq recorded a major setback in its attempt to import gas from Turkmenistan via Iran. The project stalled under direct US pressure, leaving the country facing severe electricity shortages during the summer.
In contrast, the Ministry of Electricity launched Iraq’s first waste-to-energy project in the Nahrawan area of Baghdad, with a planned capacity of 100 megawatts per day, combining environmental and economic objectives.
Public Finances Under Pressure
Public finances faced mounting challenges in managing spending and deficits amid near-total reliance on oil revenues.
In February, the Ministry of Finance issued Iraq’s first national bonds worth two trillion Iraqi dinars, seeking to broaden domestic financing tools. In March, the ministry announced the outcome of meetings with the International Monetary Fund, which emphasized the need for banking sector reform and expanded ties with correspondent banks.
Political pressure became evident in July with delays in paying salaries to fighters of the Popular Mobilization Forces (PMF), a state-recognized coalition of predominantly Shiite armed groups. Officials cited technical reasons, while other accounts pointed to external pressures.
In December, the government suspended new appointments, promotions, and allowances until the approval of the 2026 federal budget, signaling tightening fiscal space.
Central Bank: Policy Shifts and Higher Gold Reserves
Monetary policy also saw significant changes. In January, the Central Bank of Iraq announced the termination of its electronic platform for dollar sales, while maintaining a mechanism for travelers.
In August, Iraq raised its gold reserves to 171.9 tons, retaining its position as the world’s 29th largest holder, a move seen as strengthening monetary stability.
In December, the Supreme Administrative Court approved the cancellation of a decision requiring real estate purchases to be deposited in banks, a ruling described as a legal victory for citizens.
Trade and Agriculture: Relative Improvement
Agriculture emerged as one of the most positive sectors in 2025. Iraq achieved a wheat production surplus, with marketed quantities exceeding five million tons for the third consecutive year. The Ministry of Agriculture banned imports of more than 40 products to support self-sufficiency and expanded date exports to Asian and European markets.
Investment activity included the granting of 252 agricultural licenses and the approval of one of the largest seasonal agricultural plans in government history. Iraq also participated in the FAO global exhibition “From Seeds to Foods,” aiming to link local products to international value chains.
Planning, Reconstruction, and Development
The 2025 population census was described by the prime minister’s financial adviser Muthar Mohammed Saleh as the most significant economic and developmental event of the year, providing a comprehensive database to guide public policy and improve spending efficiency.
Saleh told Shafaq News that “the census is not merely a statistical exercise but a sovereign planning tool that enables the state to shift from estimating resources to managing them based on knowledge.”
Iraq’s population reached approximately 47 million in 2025, with an annual growth rate of about 1.99 percent. The Human Development Index rose to 0.695, reflecting gradual improvements in education and health compared with previous years.
The Ministry of Construction and Housing completed 199 projects across roads, bridges, water, sewage, and housing sectors. Ministry spokesperson Nabil Al-Saffar told Shafaq News that several traffic congestion relief projects in Baghdad, including bridges and overpasses, were opened or fully completed during the year.
Internationally, the World Bank announced $930 million in financing for Iraq, including support for the Development Road project, while the prime minister launched an investment opportunity package valued at $450 billion across multiple sectors.
Credit rating agency Fitch rated Iraq at “B-,” citing heavy dependence on oil and weak governance, and warning of delays to the 2026 budget, while noting continued internal stability.
Despite tangible achievements in oil, refined products, agriculture, and population data, economic gains in 2025 did not translate into a clear improvement in living standards, as price pressures, unemployment, and service shortcomings persisted.
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- Full accurate English translation:
"Government sources: 'Savaya' [or 'Safaya'], Trump's special envoy to Iraq, will visit Baghdad in the first half of the upcoming month"
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