What Does the Iraqi Economy Need for Reform? An Analytical Reading of the Current Reality and Paths for Correction
The Iraqi economy has suffered for many years from a clear paradox. It possesses large financial resources, yet it has a weak ability to transform these resources into real and sustainable development. The state of relative financial stability that Iraq is experiencing today does not necessarily mean that the economic structure is sound. Rather, it conceals deep and accumulated structural imbalances resulting from excessive reliance on oil, the inflated role of the state, and weak economic and administrative institutions. Therefore, any serious discussion about reforming the Iraqi economy must begin with a realistic diagnosis of these imbalances before moving on to reform prescriptions.
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Successive governments have managed short-term stability through expansionary public spending, benefiting from oil revenues and rising foreign reserves. However, this approach has created a fragile economy that depends on oil shocks rather than on production. Public budgets have expanded significantly since 2004, not because of growth in the productive base, but due to rising operational expenditures, especially wages and subsidies. As a result, the state has become the largest employer and income source in the country. This reality has placed a permanent burden on public finances and limited the government’s ability to direct resources toward investment and long-term development.
The expansion of the public sector workforce and the multiplicity of salary and allowance laws have created deep distortions in the income structure and weakened principles of equity and efficiency. An economy cannot transform into a productive one as long as public employment replaces real job opportunities in the private sector. Therefore, reforming the wage scale, linking wages to productivity, and redefining the role of the state from a direct employer to a regulator and supporter represent essential steps in the reform path.
At the same time, the social support system reflects another form of structural imbalance. While universal subsidies have important social value, they have led to significant waste of resources and reduced the effectiveness of social protection. Reform here does not mean reducing support, but rather redirecting it toward the most vulnerable groups and linking it to genuine economic empowerment policies that open the door to work and production instead of permanent dependence on assistance.
The energy sector represents one of the most prominent structural challenges draining public finances and hindering growth. Massive spending on electricity has failed to provide a stable service due to weaknesses in management, governance, and revenue collection. The continued flaring of associated gas is a clear example of poor resource management, costing Iraq billions of dollars annually that could have been transformed into energy, income, and job opportunities. Genuine reform in this sector requires comprehensive restructuring, not partial or temporary solutions.
Regarding public debt and fiscal deficits, the problem does not lie in their existence per se, but in how they are used. Borrowing to finance operational spending deepens the crisis, while debt can be a positive tool if directed toward productive projects with clear returns. This highlights the need for a medium- and long-term fiscal framework that links deficits to growth and prevents placing unfair inflationary or tax burdens on citizens.
Despite these challenges, Iraq has important strengths, most notably monetary stability, high foreign reserves, and low inflation. However, these indicators will remain limited in impact unless they are translated into real growth in the actual economy. This requires fundamental reform of the banking sector so it can finance investment and production rather than merely act as a channel for liquidity circulation.
The weakness of non-oil revenues further reveals the depth of the institutional crisis. The absence of effective governance, complex procedures, and the spread of the informal economy all limit the state’s ability to collect revenues fairly and efficiently. Institutional reform is no less important than fiscal reform, as it provides the framework through which economic policies are implemented.
Ultimately, no economic reform in Iraq can succeed without a strong and active private sector. The state can no longer continue as the sole engine of the economy. What is needed is a stable business environment that protects investors, reduces bureaucracy, and provides clear and fair rules for competition. An efficient private sector is not a substitute for the state, but an essential partner in achieving development.
Today, the Iraqi economy stands at a critical turning point. Either the current financial stability is used to launch genuine structural reforms that rebuild the economy on the foundations of production and diversification, or reliance on oil and public spending will continue, with all the future risks this entails. Reform is not merely a political option, but an economic necessity to ensure stability and development for future generations.
Iraq seeks coordination with the International Trade Centre to enhance trade exchange
Border crossings statement
The head of the Border Ports Authority, Omar Al-Waeli, discussed on Thursday ways to enhance cooperation and facilitate international trade during his reception of an official delegation from the United Nations International Trade Centre, coming from Switzerland, headed by Pierre Bonthonno, Director of the Trade and Investment Facilitation Department, and Director of Trade Facilitation and Digital Transformation Programs and Trade Policy Advisor.
Network Statement from the Border Ports Authority
The Chairman of the Border Ports Authority, Lieutenant General Dr. Omar Adnan Al-Waili, received an official delegation from the United Nations International Trade Centre, coming from Switzerland, headed by Ms. Pierre Bonthonno, Director of the Trade and Investment Facilitation Department, the Director of Trade Facilitation and Digital Transformation Programs, and a Trade Policy Advisor, with the aim of strengthening cooperation and facilitating international trade.
The Chairman of the Authority provided a detailed explanation of the Authority’s work and efforts in maximizing non-oil revenues and combating smuggling in all its forms, stressing that the Authority is witnessing a broad digital transformation through the introduction of modern technologies, data exchange between the relevant working parties, networking of sonars at all border crossings, and activating cross-border trade according to the TIR system, with direct follow-up and supervision from the Prime Minister.
Al-Waeli stressed the continued hard work to enhance security and stability at border crossings, which will positively impact the increase in trade exchange in Iraq and facilitate international trade.
For their part, the members of the delegation praised the measures taken by the Authority in the field of governance and electronic oversight, and expressed their admiration for the efforts it is making in the field of combating smuggling and rebuilding border crossings, stressing their readiness to provide technical and training support to improve the Authority’s technical capabilities.
This visit reflects the International Trade Centre’s interest in strengthening cooperation with the Border Ports Authority with the aim of improving work efficiency and promoting stability and economic development.
The financial situation has deteriorated; salaries in Iraq are burdened by inflation and debt.
- Salaries in Iraq today are no longer sufficient to cover daily needs due to increasing inflation, and it has become clear that Iraqi families are facing numerous challenges in securing basic necessities.
Amidst a continuous rise in prices and stagnant wages, Iraqi families are forced to completely rearrange their daily lives, focusing on necessities.
This reality has impacted food, education, and housing, making small debts and credit purchases a part of many people's lives. Meanwhile, the effects of the economic crisis are worsening, impacting the social fabric and mental health of families.
Iraqi salaries are classified as low globally, and almost put most families under constant financial pressure, especially with inflation and income instability.
According to data from the World Bank and the International Monetary Fund, Iraq's average per capita national income is approximately $5,000–$6,000 annually (2024), or about $400–$500 per month. It is often lower.
Erosion of purchasing power
For his part, economic researcher Ahmed Eid said, “The erosion of the purchasing power of the monthly salary has pushed the Iraqi family to radically change its spending behavior; the focus is now only on necessities after the decline in the ability to cover monthly needs.”
Eid added that “Iraqi families have been forced to cut back on luxuries, reduce food quantities, and look for cheaper goods, as well as postpone many basic expenses, in an attempt to adapt to a limited income that now only meets a small part of their daily needs.”
He explained that “high prices and stagnant wages, along with weak market oversight, have directly contributed to widening the income and spending gap among low-income families.”
He said: “The monthly salary now only covers a few days of the month, while prices continue to rise without any effective control to prevent exploitation or monopoly.”
Eid pointed out that “small debts and deferred purchases have become part of the daily economy of Iraqi families, from shop debts to home installments and small loans, which has led to the creation of a state of social fragility, which is greatly exacerbated by any default in payment or sudden loss of income.”
She also pointed out that “alleviating the burden on Iraqi families requires urgent policies that include controlling the prices of basic commodities, developing real market oversight, reconsidering the salary scale in line with price levels, in addition to expanding social protection networks, and providing productive job opportunities that guarantee an income sufficient for the family throughout the month and not just for a few days.”
A large gap between income and prices
Economic researcher Abdullah Najm also believes that “the instability of monthly income has directly affected the long-term decisions of Iraqi families, as education is no longer seen as an investment for the future as much as it has become a financial burden that is difficult to bear, while postponing housing and relying on rent has become a forced option for many families, while planning for having children has declined in light of the lack of a sense of economic security.”
Najm confirms that “the informal economy has become a fundamental pillar in the lives of a large number of Iraqi families, as families resort to side jobs, daily work, and small projects inside homes to compensate for the deficit in salaries. Although this type of economic activity lacks legal protection and stability, it constitutes a temporary outlet to bridge the income gap.”
He points out that “remittances from relatives inside and outside Iraq have played an important role in keeping many families above the poverty line, especially those who depend on the support of sons or relatives working abroad,” explaining that “this support reflects the fragility of the local economy more than it reflects the strength of the social safety net.”
Abdullah Najm also points out that “the continuous financial pressure has left deep effects on the family fabric, as cases of tension and anxiety have increased within the family, and this has been reflected in the marital relationship, the upbringing of children and mental health in general, which has made the economic crisis go beyond its financial dimension, to turn into a social and psychological crisis that affects the stability of the whole of society.”
The salary doesn't even cover basic needs.
Citizen Mohammed Jassim, a low-wage employee, says, “Life has become unprecedentedly difficult. My salary barely covers food; everything else has become secondary. I used to buy some luxuries for my home and children. But today, everything is tied to necessities only. Meat, fish, and many other food items have become more expensive. And there’s no point in talking about the ration card items, because most of them are unfit for consumption.”
Risk of compromising employees' livelihoods
Tampering with employee salaries in light of this dire economic situation poses a direct threat to social and economic stability in Iraq.
Families are facing enormous pressure as a result of rising prices, stagnant wages, and eroding purchasing power, forcing them to focus on necessities and resort to debt and deferred purchases.
Any reduction in salaries will increase the fragility of families’ financial situation and complicate their ability to meet the most basic requirements of life, which will exacerbate family ttension and psychological pressures and threaten the entire social fabric
Chaired by Al-Humeis, a coordination meeting was held to follow up on the steps for opening the Erbil Stock Exchange.
The Chairman of the Iraqi Securities Commission, Faisal Al-Haimas, and his accompanying delegation, chaired a coordination meeting with the Minister of Finance and Economy in the Kurdistan Region of Iraq, Awat Janab Nouri, at the request of the Ministry of Finance in the region to follow up on the procedures for opening the Erbil Stock Exchange.
During the meeting, it was confirmed that the Iraqi Securities Commission had previously granted the necessary license to establish the Erbil Stock Exchange, and that the license was complete from both a legal and regulatory standpoint. The meeting was dedicated to discussing the executive, administrative, and technical procedures undertaken, as well as the remaining requirements for the actual commencement of operations at the exchange.
The attendees also reviewed the steps taken by the relevant authorities and discussed mechanisms for joint institutional coordination to expedite the completion of the remaining requirements, ensuring that the market operates in accordance with applicable regulations and instructions and best practices adopted in regulating financial markets.
For his part, the head of the authority affirmed the authority’s keenness to follow up on the implementation of the granted licenses and ensure full compliance with regulatory requirements, and to cooperate with the relevant authorities to overcome obstacles, in a way that contributes to strengthening the investment environment and supporting financial stability and the growth of the national economy.
This meeting comes within the framework of strengthening coordination between the center and the region, and supporting efforts aimed at the practical activation of the licenses granted, in order to support the development of the Iraqi capital market.
Nasiriyah goes digital... FTTH fiber optic internet has reached Al-Jubayish
The IT manager is optimistic
Nasiriyah is nearing a complete digital transformation, a goal pursued by a department called the "Digital Transformation Center," as confirmed by Hussein Muhi Hariz, Director of Communications and Information Technology in Dhi Qar. He tells 964 Network that the FTTH (Fiber to the Home) internet has reached all areas of Dhi Qar, even Al-Jubayish in the south and Al-Fajr in the north. Nasiriyah has reached 98% completion, making Dhi Qar the second most successful governorate after Baghdad. With the arrival of this service, experts and officials expect the era of poor internet in Iraq to end, eliminating the need for wireless internet and its many problems. However, tower owners have a different opinion, and 964 Network has previously documented their repeated protests
Hussein Muhi Hariz - Director of Communications and Information Technology in Dhi Qar, for 964 Network :
The number of subscribers to the fiber optic cable service has reached 85,000 in Dhi Qar, after the service was non-existent or at a low level, and most of the districts and sub-districts have been covered, and it is in a state of continuous development.
There are projects between Dhi Qar and neighboring governorates such as Muthanna, Basra, Maysan, Wasit and Diwaniyah, which are related to international projects and capacity transfer and are currently under implementation. There are also other projects to provide protection routes to ensure that communication service in the governorate is not interrupted.
Previously, only one company was responsible for the (FTTH) project, and now there are two companies. The completion rate in Nasiriyah has reached 98%, and it has been almost completely completed in one of the districts.
Most government departments have been equipped with internet services through e-government, and we have maintenance teams in three districts, North, South and the governorate center, to ensure that the internet service is not interrupted.
We have a committee specializing in promoting citizens’ subscription to (FTTH) services, which offer services that are much better than “wireless” services, as they are secure and of high quality, and most of our staff are trained to respond quickly in case of any damage.
The terrain of Dhi Qar is different from others due to the presence of marshes and agricultural lands, and this is the biggest challenge.
Interaction is ongoing between government departments, and we do not start any project until we have obtained approvals from the relevant departments to prevent conflicts.
The Minister of Communications took it upon herself to equip schools with free internet, and Dhi Qar was in second place after the capital, Baghdad, with 300 schools and the number is increasing.
We have completed 98 communication booths in Nasiriyah Central Prison and the Correctional Prison to provide a secure communication service, under the supervision of the competent security agencies to ensure that inmates can contact their families.
Dhi Qar Governorate is distinguished by the presence of e-government. It is the first governorate in Iraq to work on the subject of e-government, and the Digital Transformation Center has been activated and opened in the governorate. God willing, the future will be better for activating e-government and the official government email.
Even districts far from Nasiriyah, such as Al-Jubayish district (90 km south) and Al-Fajr district (120 km north), were included in the (FTTH) services and the service reached them.
The economy of screens and virtual currency: What does the first list of electronic games in Iraq hide?
Protection and guardianship
When the Board of Commissioners of the Media and Communications Commission voted on the first official regulation for electronic games in Iraq, the decision appeared on the surface to be a technical step concerning an increasingly popular entertainment sector among young people. However, at its core, it opened a wider door to a question that transcends the confines of screens, delving into the nature of the relationship between the state and society in the digital sphere, the limits of what can be regulated or controlled, and what can become a new tool of restriction under the guise of protection, security, and social peace. In a country that has lived for years with intermittent decisions to block certain games and waves of youthful anger rejecting the criminalization of their favorite pastimes, this new regulation seems like a belated attempt to organize the landscape. But it is also a true test of the institutions' ability to move from a logic of arbitrary prohibition to one of rational regulation.
A small list... big questions
Digital technology expert Ali Al-Omran, speaking to Baghdad Today, commented on the importance and implications of the move, saying, "The approval by the Board of Commissioners of the Media and Communications Commission of the first official regulations governing electronic games in Iraq represents a long-awaited qualitative leap towards protecting users' rights, especially those of children and adolescents, and promoting healthy and responsible practices in a rapidly growing sector." Al-Omran views the decision as an attempt to end the regulatory vacuum that, in recent years, has allowed for conflicting decisions between the legislative and executive branches, and between bans and censorship campaigns on one hand, and the reality of widespread and unregulated use on the other, all in the absence of a clear legal framework defining responsibilities, rights, and obligations.
Al-Omran believes that the essence of the change lies in the fact that the regulation "establishes a clear legal framework that governs the relationship between users and game service providers and digital platforms, and lays the foundations for protecting privacy, controlling content, and regulating advertising and in-game purchases, thus limiting exploitation and irresponsible practices." This point opens up a wide field for discussion about the economics of electronic games in Iraq. Previously, millions of small purchase transactions made by players via bank cards or prepaid cards took place in a gray area, where users did not know the exact amount of money being withdrawn from their accounts, nor the extent to which platforms adhered to data protection rules or prevented exploitation. There were no effective local oversight mechanisms for what happens within these interactive worlds that blend gaming, spending, and social interaction all at once.
From prohibition to regulation
However, Al-Omran points out that the importance of the decision "lies not only in its issuance but also in its implementation mechanisms. The success of the regulations depends on the clarity of the executive instructions, the adoption of precise age classification criteria, and the provision of effective channels for receiving and addressing user complaints transparently and quickly." Here, the discussion shifts from the level of intentions to the level of institutional structure. Iraq, which witnessed in 2019 a decision by the House of Representatives to ban certain games on the grounds that they encourage violence and threaten social peace, also experienced weaknesses in implementation and a duality between the official discourse that condemns these games and the actual reality in which players continued to access them through circumvention tools. This situation reveals the difference between a hasty political decision and a well-considered public policy that possesses the tools for implementation, monitoring, and evaluation.
From this perspective, the new regulations appear to be an attempt to redefine the state's role in this matter, not merely as an authority to prohibit or permit, but as a regulator striving to balance three interconnected dimensions: protecting vulnerable children and adolescents from addiction and psychological and behavioral harm; respecting the rights of adult users to access the entertainment content of their choice; and avoiding stifling investment opportunities in the gaming and esports industry, one of the fastest-growing sectors in the global digital economy. Therefore, Al-Omran emphasizes the need to "be wary of the risks of excessive restrictions or imposing regulatory burdens that overburden local developers. A delicate balance must be struck between protecting users and supporting innovation and investment in the digital economy." The problem, as he sees it, is not the existence of rules governing the operation of platforms, but rather the transformation of these rules into a bureaucratic labyrinth that deters investors, or into a selective tool used to pressure specific entities under seemingly neutral ethical and security pretenses.
Gaming economy and virtual currency
At the heart of the electronic games regulation list stands a highly sensitive issue that is often neglected in public discussion: the gaming economy and virtual currency. This world operates outside the walls of traditional banks, where recharge cards sold in telecommunications shops and kiosks are intertwined with cross-border digital wallets, and deals to purchase virtual weapons, digital outfits, and distinctive characters. Ultimately, however, it consumes an increasing portion of Iraqi families' income, especially in homes where daily gaming has become a lifestyle rather than just a fleeting pastime. Young players pay scattered amounts that seem small at first glance, but at the end of the month, they turn into a real figure that puts pressure on the family budget. Meanwhile, the movement of these funds remains without sufficient transparency regarding the percentage of what actually goes to the companies that own the platforms, and what is leaked through local intermediaries in a gray market that extends from recharge card sellers to disguised accounts on international platforms. In this context, the new regulation appears to be facing a double test. On the one hand, it is required to establish clear rules for targeted advertising within games and to prevent "disguised gambling" models that are embodied in boxes of luck and random prizes designed to attract more spending. On the other hand, it is required to open the unspoken file related to tracking the paths of these virtual payments and linking them to local regulatory and banking systems, in order to protect users from exploitation, and at the same time prevent this invisible economy from becoming a potential platform for money laundering or financing activities outside the framework of the law.
Legal basis and constitutional limits
Behind this entire debate lies an inescapable legal and constitutional question: On what laws will this regulation actually be based, and to what extent is it consistent with the Iraqi Constitution? Article 38 of the Constitution guarantees freedom of expression by all means, freedom of the press and media, and freedom of communication, provided that these freedoms are regulated by law. Herein lies the debate among constitutional law and human rights experts. Some argue that regulating electronic games can fall under the state's authority to protect public order and morals, provided that the standards of necessity and proportionality are respected and that it does not become a pretext for censoring content or restricting digital expression. Conversely, others raise a critical question: Will the regulation be an extension of previous decisions that are more political or moral than legal in nature? There is a fear that it will become a "constitutional umbrella" for selective bans under the guise of protecting children or combating violence, without clear judicial basis or effective parliamentary oversight.
They point out that the Media and Communications Commission, which is based on broadcasting and communications regulations, needs to clarify to the public and parliament how the regulation will be implemented: Will it be considered merely regulatory instructions within the scope of the powers granted to it, or will it be used as a basis for restricting content, resulting in the blocking of platforms and games or the legal prosecution of users and developers? Will its decisions be subject to appeal before the administrative judiciary or the federal court, or will its decisions remain practically immune from effective oversight? Between an interpretation that sees the regulation as a logical activation of regulatory powers, and another that fears it will turn into a tool in the hands of a changing political or security mood, the real test remains in the detailed texts and executive instructions that have not yet been fully revealed, and in the extent to which they are subject to the principles of the constitution and not to the whims of the moment.
Between protecting users and stifling innovation
On the other side of the debate, the concerns of families and broad segments of society regarding the behavioral and health effects of certain games based on violence, disguised gambling, or toxic rhetoric are prominent. These families have lived in recent years with a contradiction between the calls from religious figures, educators, and psychologists to confront the "invasion of violent games" into children's rooms, and an economic and cultural reality that has made the smartphone the only refuge for entertainment in impoverished neighborhoods and cities lacking safe play spaces and organized cultural alternatives. Hence, Al-Omran's statement that "the regulations send a reassuring message to families and society that the state is seriously addressing the health and behavioral effects of electronic games, and may contribute to creating a safer environment for players, while simultaneously encouraging the organized and sustainable growth of the gaming and esports industry," seems like a bet on the possibility that the regulations could become a new pact between the state and society regarding the digital space, rather than just another addition to a long list of incomplete policies.
But this approach, as the expert himself explains, requires a broader participatory framework for implementation. It's not enough for the regulations to be issued by a board of commissioners; rather, as Al-Omran says, developers, health and behavior experts, and civil society organizations must be involved in the implementation and ongoing evaluation phases. This is essential to transform the regulations from a legal text into "an effective tool that promotes the safe and responsible use of electronic games in Iraq." This involvement doesn't just mean holding workshops or seminars, but rather integrating these stakeholders into decision-making mechanisms and in the periodic review of the regulations to keep pace with the rapid evolution of gaming technologies and methods of exploitation, from slot machines to carefully designed addictive systems, all the way to open gaming environments where chat rooms are mixed with content that transcends any geographical boundaries.
Will the list become a national policy or a transient tool?
In the background, the question of public policy remains strongly present: Does the regulation represent the beginning of a real shift from the logic of "banning a game here, and criminalizing another there" to the logic of an integrated national policy for electronic games and the digital entertainment space? Or will it be added to the list of legal tools that are used selectively under the pressure of a media event or a passing campaign of anger? The answer, as the course of previous decisions suggests, will depend on whether the authority and other government bodies are able to build an integrated system that includes a clear age classification, transparent monitoring mechanisms, effective grievance tools for users, and educational and awareness policies that accompany the regulation instead of leaving families alone to face the screens. Between the opportunity this regulation provides to open the door to a local gaming industry, organize e-sports tournaments, and attract new digital investments, and the risk of slipping into a strict censorship discourse that reproduces previous images of guardianship over taste and behavior, the future of this step will be determined: either it will be the beginning of a new policy for the digital space in Iraq, or it will remain just a beautiful title on top of an old structure that has not changed.
US Consulate in Erbil: Kurdistan Region is an active gateway for US companies
- Acting US Consul General, Kaitlyn Piper, received representatives of the Chambers of Commerce and Industry in the governorates of Erbil, Duhok, Sulaimaniyah and Halabja on Thursday, December 18, 2025, at the new building of the US Consulate General.
In a press statement, the acting US Consul General said: "We consider the Kurdistan Region an active and important gateway for US companies."
Monetary policy indicators confirm the central bank will be first in 2025
Samir Al-Nassiri
In countries that adopt an institutionally managed economic system, each institution retains its independence and authority to manage economic affairs according to the methodology and philosophy that aims to achieve economic stability and the well-being of society.
Therefore, central banks receive special attention in most countries of the world as the sovereign and prudent economic institution concerned with achieving the above goal through the application of monetary policy tools and the realization of its objectives. With the approach of the end of 2025 and the beginning of 2026, and following a review and analysis of the policies, programs, and procedures implemented by the Central Bank of Iraq in 2025—a year of political and economic challenges and crises, and numerous changes at the global and regional levels, which negatively and positively impacted the Iraqi economy—the Central Bank demonstrated its wisdom and efficiency in overcoming challenges and moving forward to achieve its objectives set for the next three years.
It also proved to be the leading economic institution in 2025. On this occasion, we must appreciate the outstanding efforts made by the specialized administrative and technical leaders and distinguished employees of the Central Bank who contributed effectively to the implementation of what was stated in the government program in Axis 12 (Financial and Banking Reform) during the years (2023-2025) and the Central Bank’s third strategy and the comprehensive banking reform project.
The launch of the financial inclusion strategy, the promotion of digital transformation, the activation of electronic payments, and the strengthening of cybersecurity. The Central Bank was able to achieve economic growth and stability in extremely complex economic, security, and political conditions, and was able to implement developmental, structural, and technological policies and programs, and take numerous measures in cooperation with the government to regulate foreign trade financing, control foreign transfers, integrate into the global financial and banking system, comply with international standards, and move to the electronic platform.
Achieving the main and sub-goals of its third strategy and starting to implement the comprehensive banking reform project according to the paths drawn up in cooperation with the global consulting firm Oliver Wyman to enable the banking sector to grow and develop and to be a solid, comprehensive, modern and flexible sector that works hard to build a rapidly growing national economy, contributes to development and investment, creates a cumulative increase in the gross domestic product, provides one million job opportunities for the unemployed, raises the market value of the private banking sector and achieves rewarding and sustainable returns for its investors. In addition to increasing foreign investment and achieving growth in financial inclusion, financing and deposits.
Analysis of monetary policy indicators as of the third quarter of 2025 indicates the building of foreign exchange reserves of around $100 billion. Gold reserves at the Central Bank recorded a significant growth rate of (64%), reaching a value of (27.552) billion dinars, equivalent to (173) tons during the same period, compared to a value of (16.817) billion dinars in the second quarter of 2024. The decrease in the issued currency contributed to a decrease in the inflation rate, which maintains the stability of the general price level, as the currency issued by the Central Bank recorded a decrease in the rate of (5.50%), reaching (99.681) billion dinars during the same period, compared to a value of (104.127) billion dinars in the second quarter of 2024.
The decrease in the inflation rate also indicates a decrease in the general price level, as inflation recorded a low rate of (76%), reaching (0.8%) compared to the second quarter of 2024, which reached (3.5%). This confirms that the Central Bank was able to build basic pillars for monetary and economic stability and achieve the most important objectives of monetary policy.
Therefore, I believe, with complete impartiality and transparency, that we should stand in respect for the efforts of the Central Bank and its distinguished staff who achieved the above accomplishments, and I hope that those efforts will be evaluated, which is a legitimate entitlement.
The exchange rate: between traders' profits and the erosion of purchasing power
The exchange rate stands at the heart of a complex economic equation, in which the interests of imports are intertwined with weak policies supporting national production, leading to market imbalance and a decline in quality, and opening the door to deeper repercussions on economic stability.
Iraqi markets are witnessing clear shifts in the nature of goods traded amid the escalating effects of the exchange rate on import and sales activity, which has directly impacted consumer choices and the level of quality offered, at a time when the purchasing power of a large segment of citizens is declining.
In this context, Yasser Al-Husseini, a member of the Parliamentary Committee on Economy, Industry and Trade, confirmed that the difference between the actual value of goods in manufacturing countries and their prices when they enter Iraqi markets gives some traders high profit margins, which pushes them to import lower quality and cheaper goods.
Al-Husseini explained that “these high margins encourage preferring poor quality over quality in the absence of real support for local industry,” indicating that “current policies have contributed to complicating the situation of the private sector instead of addressing it.”
Al-Husseini added that “the rise in the dollar’s price negatively affects the distribution of goods within local markets, especially with the rise in commodity prices compared to when they were imported, coinciding with a decline in the individual’s purchasing power, which directly affects the quantity, quality, and value of the goods offered.”
These indicators come amid growing concerns about broader economic repercussions as exchange rate volatility continues, foreshadowing deeper changes in the local market unless existing imbalances are addressed with policies that support national production and monetary stability
ATM machine arrived in Hajiawa district for the first time
The first ATM was installed in Hajiawa district of Raperin Autonomous Administration on Thursday, December 18,
This device is dedicated to serving salaried employees, while those who have “my account”, can now withdraw their salaries in their district without having to go outside Hajiawa.
This step will provide great convenience to the citizens of the region and reduce the pressure on the banks of the central administration of Raperin.
It is worth mentioning that the “My Account” project is a strategic project of the Kurdistan Regional Government to digitize the salary payment system and switch from cash to banking.
Currently, several banks are participating in the “My Account” project and salaried employees can open bank accounts through them, namely:
Cihan Bank: One of the private banks active in this project.
RT Bank: Involved in providing banking services to employees.
Iraqi Islamic Bank: Provides services to salaried employees.
BBAC Bank: It is one of the Lebanese banks operating in the region and participating in the project.
NBI (National Bank of Iraq): One of the banks with the most branches in the provinces.
Trump's representative's visit to Baghdad was postponed until after Christmas.
An informed source confirmed on Thursday that the arrival of former US President Donald Trump's representative in Baghdad has been postponed until further notice, amid expectations that he might arrive after Christmas.
The source told Al-Maalomah that “all indications pointed to the actor being expected to arrive after December 20, but the date was mysteriously postponed until after the New Year, ie, the beginning of next January.”
He added that “Trump's representative will hold a series of meetings with the Iraqi government and political leaders to explain the nature of his work and the White House agenda, which will clarify the expected goals and tasks. Iraqi forces will then engage with this agenda, either through direct meetings in Baghdad or through other official channels.”
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Central Bank: Salaries, subsidies, and services expenditures are difficult to reduce due to their social repercussions.
Central Bank Governor Ali Al-Alaq affirmed the continuation of efforts to break what he described as the "financial dominance" of oil revenues over the general budget, noting that the stability of the exchange rate is a pivotal goal because it provides a safe cover for investors and citizens, while stressing that salaries, subsidies and basic services are difficult to reduce because of the social repercussions that may result.
Al-Alaq explained, during a lecture on development financing in light of the global debt crisis, held on the sidelines of the Fifth Regional Conference of the Al-Baraka Forum for Islamic Economics, which is being held in Cairo in partnership with the General Secretariat of the League of Arab States, that “the Iraqi scene is facing intertwined pressures and accumulated infrastructure and development challenges, which require diversifying the economy and maximizing public revenues,” noting that “public finances in Iraq depend on oil exports by more than 90%, which is an unconventional source subject to fluctuations in global prices, which leads to fluctuations in revenues and weak financial stability, which necessitates finding structural solutions.”
He explained that “the limited economic diversification and weak productive sectors have made Iraq a country that is primarily an importer, which puts continuous pressure on the dollar and the exchange rate, especially with the rise in purchasing power and the increase in daily demand for foreign currency, which directly affects monetary policy, which has achieved great success in balancing the maintenance of price levels, managing liquidity, and stimulating the economy.”
He pointed out that "public spending pressures, particularly on salaries, subsidies and basic services, pose an additional challenge," stressing "the difficulty of reducing these expenditures due to the potential social repercussions, at a time when the central bank is striving to avoid inflation and maintain monetary stability to protect the social structure of the country."
Al-Alaq pointed out that “Iraq has been able in recent years to finance part of the financial deficit through the development of non-oil revenues, while continuing to coordinate with the Prime Minister with the aim of maximizing these resources and reducing dependence on oil,” in an effort to break what he described as the “financial dominance” of oil revenues over the general budget.
The governor of the Central Bank affirmed that "the stability of the exchange rate is a pivotal goal, as it provides a safe cover for investors and citizens," noting that "Iraq has succeeded in raising the size of foreign reserves and linking them to a package of integrated monetary policies, which have contributed to reducing the inflation rate to about 1%, which is among the lowest levels recorded."
He added that "Iraq is in the process of governing the banking sector," revealing that "an update is underway in cooperation between the Central Bank and an international company for a comprehensive reform plan, which includes reviewing bank licenses according to new conditions and standards, in order to strengthen the banking system and raise its efficiency."
Sudanese advisor: 8 trillion dinars in tax revenues expected this year as a result of financial reform policies
The Prime Minister’s financial advisor, Mazhar Muhammad Saleh, predicted that the state would achieve initial tax revenues of approximately 8 trillion dinars during the current year 2025, explaining that this figure represents about 50 percent of the total non-oil revenues estimated between 16 and 17 trillion dinars, at a time when initial estimates indicate the possibility of non-oil revenues rising to about 18 trillion dinars by the end of the year .
Saleh said, "These indicators reflect a gradual shift in the structure of public revenues as a result of the policies adopted by the government within its economic and financial reform program, which aims to reduce dependence on oil as a primary source of public revenues and to enhance resources."
He explained that “the government, with legislative support from the House of Representatives since 2022, has developed a broad reform roadmap aimed at raising the contribution of non-oil revenues to about 20 percent of total public revenues in annual budgets, after it did not exceed 10 percent in previous years, which is considered a structural transformation in public finance management.”
Saleh explained that “improving the efficiency of indirect tax collection, especially customs, is an important factor, as every 1 percent increase in the efficiency of customs collection, at current levels, provides additional revenues exceeding 800 billion dinars annually,” stressing that “these additional resources have a real ability to finance the salaries of tens of thousands of public service employees and alleviate the pressure on the public treasury.”
The financial advisor pointed out that “raising the efficiency of collection is directly related to bringing the tax authority into the scope of broad digital governance, especially in collection and enforcement operations, explaining that this transformation has begun to take its practical course through the electronic customs project, which has begun using information technology and ASYCUDA systems in the inspection and evaluation of goods entering the country.”
He added, "These steps complement the control of border crossings and linking them to modern electronic systems, in addition to coordinating with foreign trade financing systems in foreign currency, in order to achieve better control over import movement and reduce waste and misuse of foreign currency provided by the state."
Saleh emphasized that "these measures combined contribute to reducing tax evasion, whether in customs duties or the resulting commercial profits taxes, as well as enhancing transparency in import, pricing and external financing operations."
The Central Bank of Iraq acknowledges the crisis: Oil prices and liquidity withdrawals have affected "cash reserves".
The Central Bank of Iraq confirmed on Wednesday that the decline in oil prices and the withdrawal of liquidity from the markets are two factors that negatively affect Iraq's hard currency reserves.
The bank said in a report, which was received by Shafaq News Agency, that “Iraq’s reserves are closely linked to the size of oil revenues, which makes them vulnerable to fluctuations in global oil prices. Also, the monetary sterilization carried out by the Central Bank to withdraw liquidity from the market has a negative impact, due to the need to utilize foreign reserves.”
The bank added that "oil prices fell from $81 for the second quarter of 2024 to $69 for the same quarter of 2025, and consequently reserves decreased from 142.69 trillion dinars to 126.16 trillion dinars for the same period."
He pointed out that “the Central Bank’s withdrawal of cash liquidity from the market in order to maintain monetary stability led to an increase in cash receipts (i.e., the bank’s acquisition of dinars in exchange for selling dollars), from 18.37 trillion dinars to 21.66 trillion dinars for the same period (i.e., an increase in dollar sales), in addition to the practice of the general budget deficit, which has an impact on net foreign reserves.”
A new financial roadmap for Iraq: The Sudanese government begins reforming salaries and benefits.
In a move described as bold and unprecedented, the government of Prime Minister Mohammed Shia al-Sudani is moving towards redrawing the financial map of Iraq by opening one of the most sensitive and complex files: the file of salaries and senior privileges in the state.
The government is putting forward a reform vision aimed at streamlining spending and controlling operational expenses, with a focus on ending special privileges for presidencies and senior ranks, in an attempt to achieve financial justice, protect social stability, and ensure the sustainability of the general budget in light of internal challenges and accelerating global economic fluctuations.
On Monday, Prime Minister Mohammed Shia al-Sudani chaired an extraordinary meeting of the Ministerial Council for the Economy, during which a number of important decisions were made aimed at rationalizing expenditures and maximizing the state’s financial resources.
Regarding spending reduction measures, the Council discussed the allocations and salaries of the three presidencies, and the Prime Minister directed that an urgent review of this file be conducted, and that work be done to equalize the salaries and allowances of all employees of the Presidency of the Republic and the Presidency of the House of Representatives with the employees of the Presidency of the Council of Ministers, in a step aimed at achieving job fairness and reducing financial disparities.
Al-Sudani also directed the relevant committee in the Ministry of Planning to make the necessary update to the report on unifying the salary scale for all state employees, and to take into account the recommendations submitted in this regard.
The council decided to reduce the allocations for state employees’ travel by 90%, and to prohibit it except in cases of extreme necessity and with the approval of the relevant minister, in addition to reducing the rates of supervision and monitoring of new projects.
As part of reforming the social support system, the Council tasked the Minister of Trade with reviewing the ration card and reforming its mechanisms to ensure that it is directed to its actual beneficiaries from the vulnerable classes.
As for the procedures for maximizing revenues, the Prime Minister directed the ministerial committee formed under Cabinet Resolution No. (550) to reconsider the calculation of non-oil revenues in the Kurdistan Region of Iraq, which are currently deposited as a lump sum into the Ministry of Finance’s account, in coordination with the regional government.
The Council also stressed the need to support and enhance the implementation of the pre-declaration system in the Customs Authority in coordination with the Central Bank of Iraq, to strengthen electricity collection, to review the current tariff, and to adopt automation and electronic payment exclusively in all collection operations, especially in the electricity sector, the Baghdad Municipality, and municipalities throughout the country.A clear roadmap for financial reformIn this regard, the Prime Minister’s Advisor for Financial Affairs, Mazhar Muhammad Salih, affirmed that the meeting of the Ministerial Council for the Economy with Prime Minister Muhammad Shia’ al-Sudani constituted a strategic milestone for setting a clear roadmap for financial reform, confronting the challenges of fluctuating oil prices, and reducing dependence on oil revenues.Saleh told Al-Eqtisad News in a special statement that the meeting was dedicated to reviewing the reality of fiscal policy in Iraq, and the concept of fiscal consolidation as a tool to address the deficit and reduce the debt gap, especially internal debt, through re-engineering costs and controlling public spending, without resorting to shock measures or harsh economic surgeries, and in a way that preserves social stability.He added that the Iraqi economy cannot remain dependent on oil revenues in light of global geopolitical fluctuations, noting that operational expenses constitute approximately 70% of total public spending, which necessitates a review of them according to clear and well-thought-out priorities.Shocking figuresIraq spends about 100 trillion dinars annually on salaries for employees and retirees, at least 40 trillion of which goes to senior officials.The 2024 budget amounted to more than 144 trillion dinars, with a deficit exceeding 63 trillion dinars.In Iraq, there are approximately 6,000 employees out of roughly 4 million who are classified as "special grades," and this group receives the lion's share of salaries. Parliament and previous governments attempted to "streamline spending" and establish a "salary scale," but these efforts failed due to resistance from those holding "high salaries."Iraq faces several risks due to its economy's dependence on "oil," a commodity that is subject to political and security crises around the world.The number of job grades for the positions of "Undersecretary" and "Director General" is estimated at more than 500 grades (A) and about 5030 grades (B), a number that exceeds what exists in Britain and America, according to experts.Employees in Iraq are divided into 10 job grades, in addition to the special grade (A), and they are in positions such as: Undersecretary of a Ministry, Secretary or Advisor in the three presidencies, up to the grade of Ambassador.The top grade (B) includes the functions of the general manager and senior supervisory tasks, and then the job grades are divided from the tenth sequence down to the first grade.In addition, there are more than 20 ministers, and more than 300 deputies or undersecretaries, along with the three presidents (of the Republic - Parliament - Ministers), totaling more than 6,000 positions that consume nearly 40% of the state’s total salaries, divided into salaries, allowances, security protections, and travel allowances, according to experts.Saleh returned to continue his speech, pointing out that "the principle of reform begins from within the state institutions, through reviewing the structure of salaries and privileges, especially in the higher presidencies, as it is a national and social message that confirms the state's commitment to justice, and consideration of the conditions of the middle and poor classes."He explained that "the meeting addressed the existence of clear gaps in public spending and miscalculations in some areas of expenditure, in addition to unjustified support that constitutes a continuous burden on the budget, which requires adopting the principle of reviewing expenditures followed globally, through re-evaluating expenditure items, and deleting or reducing the items that lead to an unjustified expansion in expenditures."He explained that the decisions discussed were classified as either measures that could be implemented immediately, or others that required study and gradual implementation, in line with the state's approach based on gradual reform and avoiding direct economic shocks.Saleh added that this approach comes as part of early preparations to restructure the 2026 budget, in light of expectations that oil prices will fall to levels that may range between $50 and $60 per barrel, while emphasizing the need to ensure the provision of salaries, wages and pensions as a top priority, without compromising the requirements of development and services.He stressed that the Iraqi economy has good cash flows, but it needs higher fiscal discipline and more efficient management of resources, to ensure that every dinar is spent in the right way, and to pave the way for a more stable and sustainable economy in the medium and long term.Accurate financial dataIn addition, financial expert Abdul Rahman Al-Sheikhli believes that the recent decisions came in response to accurate financial data aimed at strengthening the state’s financial stability, in light of a relative decline in public revenues compared to rising levels of spending.He explained that public revenues in the first half of 2025 amounted to about 62 trillion Iraqi dinars, a decrease of nearly 6% compared to the same period of the previous year, with oil revenues declining by 3.4% and non-oil revenues by 14%, which necessitated a review of financial policies in line with these changes.Al-Sheikhly explained that the Iraqi economy still relies heavily on oil as a primary source of revenue, with oil revenues reaching approximately 56.7 trillion dinars, equivalent to 91% of total revenues, compared to only about 6.2 trillion dinars from non-oil revenues during the first half of the year.He stressed that these indicators highlight the importance of diversifying income sources and enhancing the flexibility of the general budget in the face of fluctuations in global oil prices.The financial expert pointed out that the measures taken reflect a reformist approach to address a number of challenges, including high current spending, particularly salaries and wages which account for a large share of public expenditures, in addition to limited investment spending.He pointed out that rebalancing operational and investment spending is an important step towards supporting sustainable economic growth and enhancing resource management efficiency.Al-Sheikhli explained that these measures have potential positive effects, most notably improving public finance management and reducing the budget deficit by rationalizing unnecessary operational expenses and directing support to those who actually deserve it, especially with the development of the ration card system and support for the most needy groups.He also stressed that strengthening electricity collection and expanding reliance on electronic payment systems will contribute to increasing local revenues and raising collection efficiency.Sheikhly stressed the importance of implementing these steps wisely and with balance, ensuring the maintenance of public services and the continuation of investment projects, while simultaneously working to develop non-oil revenues and encourage investment in productive sectors. He emphasized that the success of these measures requires effective oversight and close cooperation among various state institutions to achieve the desired objectives without imposing additional burdens on citizens.Al-Sheikhli concluded his remarks by emphasizing that proceeding with these financial reforms has become an urgent necessity to strengthen the resilience of public finances and reduce the deficit gap, noting that these measures represent a real opportunity to lay more stable and sustainable foundations for the general budget, and reduce its vulnerability to fluctuations in oil prices and changes in production and exports.No previous government has dared to amend the salaries of the three presidencies, not due to a lack of conviction in the necessity of doing so, but rather because of the political complexities and high sensitivity surrounding this issue. Such attempts were typically met with unspoken resistance and behind-the-scenes political pressure exerted by influential forces.Any move in this direction would be fraught with political risks and could open the door to conflict between influential blocs and parties.This issue was also viewed as a “red line” that was difficult to approach, for fear of it being exploited politically or interpreted as targeting a particular site or institution. This prompted successive governments to avoid getting involved in it, and to be content with talking about reform without translating that into practical decisions.However, raising this issue today reflects a shift in the reform discourse, an attempt to break the deadlock in files that have remained unresolved for many years, and to convey the message that financial reform must begin from the top before the base, in a way that enhances public confidence and affirms the principle of fairness in the distribution of burdens, especially in light of the current economic challenges.US sanctions: From targeting individuals to besieging Iraq's banking infrastructure
The successive waves of US sanctions were not limited to political figures and armed factions, but extended to banks and companies, becoming a strategic pressure tool that limits Iraq’s ability to manage its money freely, and imposes compliance with US rules on the entire banking sector.
In conjunction with the escalating political discourse in Iraq regarding anticipated financial sanctions to be imposed by the US Treasury Department on Iraqi entities and figures accused of dealing with Iran or its allies in the region, records from recent years show that Washington has included dozens of financial, banking, and commercial institutions, as well as political and commercial figures, on the US sanctions list since 2018, resulting in the neutralization of their effectiveness or their complete closure.
Iraqi officials in Baghdad acknowledge that financial sanctions have become the most influential American tool in Iraq, surpassing the issue of military strikes launched in recent years.
Half of the banks are banned.
By the end of October 2025, US sanctions will have targeted many Iraqi banks, along with more than 40 political, factional, and business figures, on charges of dealing with Iran and human rights violations.
The Iraqi banking sector is almost the most affected, as the sanctions published by the US Treasury Department on its official website show that about half of Iraq’s private banks are now subject to US sanctions, which prevent them from dealing in dollars.
These sanctions mean that other local and foreign banks cannot deal with them, as they have become prohibited for them, especially Lebanese, Jordanian, Turkish and Emirati banks, which are considered the most prominent entities for Iraqi financial dealings with the outside world.
These measures indicate a clear shift in US policy from targeting individuals and small networks to restricting the banking infrastructure itself, as part of escalating pressure related to the Iran issue and financial transfers through Iraq.
Blocking access to the dollar
Based on the US Treasury Department website, it appears that Washington has placed 35 Iraqi banks on the sanctions list, which prohibits dealing with them and prevents their access to dollars. This measure has prompted most countries in the region, as well as investors and depositors, to stop dealing with them. This means that about half of Iraq’s banks are now under sanctions, with a total of 72 government and private banks, in addition to 17 financial companies for money transfer and exchange.
Iraq's oil revenues
Iraqi affairs expert Ziad al-Hashemi said that “Washington has exploited the Iraqi state’s total dependence on depositing oil revenues in American accounts and banks as a crucial political pressure tactic.”
He explained an important point in this context, which is that the United States provides a financial protection system for Iraqi oil funds from international compensation claims (related to the Gulf War), and what resulted from this protection was the process of depositing those funds in American accounts.
Al-Hashemi, a consultant in international transport economics, added that “the US sanctions regime did not stop there, but imposed a series of conditions and controls on the Central Bank of Iraq related to restructuring, organizing and reforming the Iraqi banking system, and this recently resulted in a banking reform plan that requires banks to either comply with it or go into liquidation.”
He stressed that “the Iraqi political system was turning a blind eye or contributing to supporting irregular operations and operations to break the financial sanctions regime behind the scenes, and many of its interests were harmed, and it was forced to submit, implicitly, to American demands, and to allow the Iraqi Central Bank to impose the will of reform.”
Pressure on the Iraqi political system
Al-Hashemi then continues: “It can be said that the American financial pressure deprived the Iraqi political system of many of its strengths, and restricted its ability to rebel against American policy, or to show any obstinacy in the face of American demands. This, it seems, was reflected in the behavior of that system, and made it accept bowing down to the American storm.”
He expressed his belief that “during the coming period, the Iraqi political class will try to find a way to help it continue without provoking or antagonizing the American actor.”
Al-Hashemi concluded that this allowed Washington to “monitor practices or suspicions related to money laundering and dollar smuggling operations to countries and entities sanctioned by the US, and because of which sanctions were imposed on Iraqi banks, companies and individuals related to a complex and extensive network involved in breaking the sanctions regime.”
He considered Washington’s sanctions “a severe blow to that network that defrauds the Iraqi banking system and drains its financial resources, which largely prevented it from accessing dollars and being able to transfer them outside of Iraq.”
prevailing economic system
Yasser Al-Mutawalli
We are addressing a very important topic, resulting from the outputs of the liberal economic system supported by the International Monetary Fund and the World Bank, a system based on the theory of the trickle-down effect of growth.This theory is based on stimulating investment, whether internal or external, which results in growth. Growth is defined as meeting a country’s needs for services and goods, and investment is what provides these needs.
This theory, adopted by the IMF and the World Bank, suggests that the process of stimulating investment is summarized in tax exemptions on profits and wages, which encourages investors to increase production and generate profits, and thus create broad and large job opportunities, thereby achieving sustainable growth and reaching its goals, which mean achieving well-being and more services and goods that meet the needs and desires of society.
This theory seems comfortable and satisfying when the fruits of growth fall on the citizen, but over time a group of economic experts discover that this theory cannot be applied as the profits of companies grow as institutions expand in size to become monopolies… The question is how?
The goal of investing and producing companies is to generate profits, and this goal can be achieved in two different ways. The first, and most important, is for these companies to expand their investments, whether in factories or farms, as net investments that contribute to growth and its fruits. The second way is to reduce costs to achieve maximum profits by reducing production. Large companies in this case become monopolistic through saving, which means that surplus funds leave the income cycle, thus reducing wages. This necessitates providing additional incentives to encourage them to invest domestically. The second way has appealed to companies because of its ease, thus obscuring the true purpose of growth.
But over time, and given the freedom of companies to move their money, they began planning to invest outside the country in the space of globalization to obtain incentives to achieve more profits, through the thirst of those countries for foreign investments and obtaining cheap labor and a market that accepts production, which pushes them not to expand in domestic investments. Herein lies the problem of the occurrence of people’s disturbances due to the lack of job opportunities and high prices, and the occurrence of stagflation and weak growth, despite the incentives that companies obtained from tax exemptions on their profits and other privileges within the framework of the philosophy of supply-side economics.
This is the origin of the prevailing and globally promoted economic system, which makes addressing the causes of declining growth and rising unemployment a path inseparable from advocating for the liberal growth model. Therefore, most developing countries resort to attracting foreign investment to capitalize on its potential to achieve growth that provides societal well-being by supplying the necessary goods and services and creating job opportunities.
Here, experts advise the importance of taking the necessary measures when working to attract foreign investments, to contribute to the targeted growth, provided that a balance is achieved between investment incentives such as exemptions on profits and the freedom of movement of company capital, by not allowing monopolies, in order to benefit from the theory of reaping the fruits of falling growth leaves.
This balance can be achieved through competitiveness, adopting a system of multiple companies for a single activity, and making the partnerships required to achieve this goal.
An advisor to the Prime Minister: Commodity prices in Iraq do not indicate a widespread inflationary wave.
The economic advisor to the Prime Minister, Mazhar Muhammad Saleh, confirmed that future expectations for food and basic commodity prices as the new year approaches are not unidirectional but rather are formed from a delicate balance between global and local factors.Saleh told Al-Furat News Agency that: “International institutions predict a decrease in global commodity and food prices during 2026 compared to the previous period, in light of the slowdown in global economic growth and the increase in supply in a number of markets.”
He pointed out that "some estimates suggest that prices may fall to levels below the average for the period 2015-2019, driven by lower energy and food prices, which are two key factors in easing inflationary pressures on global consumption areas, thus limiting the likelihood of sharp price increases."
Saleh added that “Iraq, which has witnessed the lowest inflation rates in its recent history, with annual inflation not exceeding 2.7% this year, appears to be in a more stable position,” noting that “macroeconomic models adopted by international institutions predict that food price inflation rates in Iraq will stabilize within the range of 2.7-3.0% during 2026, which is a moderate rate that does not portend a widespread inflationary wave.”
He explained that "this scenario remains dependent on several key pillars, foremost among them the stability of the exchange rate and the expansion of stable commodity supply through price defense policies, especially with the growing active role of modern cooperatives {hypermarkets} in providing goods at stable prices, in addition to the continuation of various support policies within disciplined financial frameworks."
Saleh pointed out that, "Given these conditions, the local market is expected to maintain its relative price balance during the next phase and most likely during the next year."
Saleh's statement: There is no liquidity crisis, and the government is proceeding with preparing the 2026 budget.
The Prime Minister’s financial advisor, Mazhar Muhammad Saleh, confirmed on Wednesday that there is no severe liquidity crisis in the short term, while indicating that the government is proceeding with the preparation of the 2026 budget within the medium-term framework of fiscal policy.The Prime Minister’s financial advisor, Mazhar Muhammad Saleh, said in a press statement that “governments usually resort to spending cuts when faced with pressures resulting from fluctuations in revenues or high current obligations, especially in rentier economies dependent on a single resource such as oil.”
He explained that "these measures come in light of fluctuating oil prices and increasing spending requirements, which necessitates discipline in managing liquidity."
Regarding the possibility of liquidity problems in the coming period, Saleh stressed that “the government is not expected to face a severe liquidity crisis in the short term, as long as oil revenues remain at their current levels and coordination between fiscal and monetary policies continues,” indicating that “continued pressure on operational spending may lead to a relative widening of the 2026 budget deficit, unless it is accompanied by controlling expenditures and strengthening non-oil revenues, especially tax and customs revenues.”
Regarding the preparation of the draft federal general budget law for 2026, he indicated that "the financial authority and the government have made significant progress in preparing it within the medium-term framework of fiscal policy," expecting that "the draft will focus on achieving a balance between fiscal sustainability and development requirements."
He added that "initial indicators suggest that investment and service projects will remain at the forefront of priorities, especially those related to infrastructure, energy and basic services, which will enhance economic growth and alleviate social pressures, while simultaneously striving to rationalize operational spending and improve its efficiency."
He stressed that "the real challenge lies not in the size of the spending itself, but in its quality and efficiency, and in the ability of public finances to gradually move from the logic of crisis management to the logic of sustainable development planning."
We will liberate Iraq and make it great again... Joe Wilson and Savaya outline the features of the new American role
Republican Congressman Joe Wilson revealed on Thursday (December 18, 2025) that he held a meeting in his office with US Special Envoy to Iraq Mark Savaya to discuss the Iraqi file and the prospects for the American role during the next stage, stressing that Savaya will work under the slogan "Make Iraq Great Again and Free It from Iran," as he put it.
Wilson said in a post on his X platform account, which was reviewed by Baghdad Today, that he was “grateful to host Mark Savaya, the US Special Envoy to Iraq, in my office for an important meeting on Iraq,” adding that he was excited to work with Savaya as “the Special Envoy to Make Iraq Great Again and Free Iraq from Iran,” stressing that “there is no one better to work on this file for President Donald Trump.”
For his part, Mark Savaya wrote in a parallel post on “X” that he had a “great meeting with US Congressman Joe Wilson and his team,” before concluding with a direct political message in which he said: “We will make Iraq great again,” in a new confirmation of adopting a slogan close to Trump’s campaign rhetoric within the United States.
This meeting brought them together amid escalating American activity related to the Iraqi file following the appointment of Savaya as special envoy to Baghdad, and his repeated talk of expected "major changes" in Iraq and the need to end the influence of weapons outside the control of the state, in parallel with the continuation of discussions about the formation of the new government and the future of the relationship between Baghdad and Washington in light of Trump's return to the White House.
Learn about the repercussions of the Venezuelan tanker blockade on Iraq, oil markets, and global energy security.
As global oil prices continue their downward trend under pressure from slowing demand and increased supply, US President Donald Trump's announcement of a comprehensive blockade on Venezuelan oil tankers adds a new layer of uncertainty to an already volatile energy landscape. Instead of focusing solely on the supply glut and the expectation that Brent crude will remain around $58 per barrel for February 2026 contracts, a new factor has entered the equation: the militarization of shipping lanes and the direct use of naval force in enforcing sanctions. From this perspective, the decision is not merely a Venezuelan affair, but a move that impacts the structure of energy markets and maritime security, inevitably affecting countries that rely on oil as their almost sole resource, most notably Iraq.
The decision to blockade Venezuelan tankers, from the perspective of an energy expert.
Energy and economic expert Ahmed Askar places this development in its broader context, telling Baghdad Today that "US President Donald Trump's announcement of a comprehensive blockade on Venezuelan oil tankers represents a dangerous escalation in the sanctions regime, and we must be wary of the wide-ranging repercussions that could affect global energy markets and regional maritime stability." This assessment captures the essence of the problem; the decision is not like traditional financial sanctions that markets can absorb through alternative mechanisms or loopholes, but rather it goes directly to the heart of the supply chain, namely the movement of tankers themselves. Askar adds that "this decision is not merely an economic measure, but carries political and security dimensions that could raise the level of tension in maritime routes, especially in the Caribbean Sea, and any disruption to the movement of Venezuelan oil tankers will immediately affect oil prices, insurance rates, and maritime shipping." In this sense, the message being sent by the White House is not directed at Caracas alone, but at everyone who deals with it, from shipping companies to major importing countries, foremost among them China.
How do markets react to a naval blockade?
However, the market's reaction to this move is neither automatic nor linear. On paper, any announcement of a tanker blockade should immediately raise prices, but the current market structure makes the picture more complex. Over the past few months, indicators have accumulated pointing to weak global demand growth and increased production from non-OPEC+ countries, primarily the United States and other Latin American nations, creating a significant supply surplus. Askar captures this paradox when he notes that "markets usually react quickly to such announcements, and a short-term price increase remains likely due to fears of reduced supply, even if the affected quantities are relatively limited compared to global production. The real impact will depend on the seriousness and duration of the blockade." He thus reminds us that what causes the shock is not the news itself, but rather the degree of its implementation, its duration, and the ability of the parties involved to find alternative ways to dispose of Venezuelan oil through "shadow" fleets and unconventional routes.
From economic sanctions to the brink of military action
The most dangerous aspect of the decision relates to its legal and political nature. Askar explicitly warns that "imposing a comprehensive naval blockade raises international legal issues, as it approaches the concept of military action if not governed by clear legal frameworks for enforcing sanctions. This could open the door to diplomatic objections from countries importing Venezuelan oil, most notably China." Here, the discussion approaches a sensitive area in international law, where the line between "economic sanctions" and "military action" becomes very thin, especially if the blockade includes forcible interception, the towing of ships to ports, or the confiscation of cargo. From this perspective, freedom of navigation, a cornerstone of the global trading system, becomes a point of contention between Washington and the affected countries, and the Caribbean waters become a testing ground for the major powers' willingness to accept the precedent of using a naval blockade in this manner within the context of economic sanctions.
Global energy landscape: supply glut and tension at sea
This development cannot be separated from a broader picture in which energy markets are undergoing rapid transformations. Oil demand is no longer growing with the same momentum as in the past two decades, due to a clear economic slowdown in China, the increasing role of renewable energy, and improved energy efficiency in industrialized nations. Conversely, the production capacity of new countries, from the United States to countries in Latin America and Africa, is expanding, generating a periodic supply surplus. In such an environment, not every supply shock translates into a significant price spike, as the market has compensatory margins from other sources. However, the repeated use of maritime blockades and sanctions against tankers creates a constant state of tension and uncertainty, driving up insurance and shipping costs and pushing some producing countries to seek alternative routes outside the traditional maritime trade system, with all the associated technical, environmental, and legal risks.
Iraq is under pressure from rising prices and geopolitical risks.
For Iraq, whose budget relies on oil for more than 90 percent of its revenue, these developments are not mere news items on trading screens, but rather a direct factor shaping its financial and political maneuvering room. Brent crude prices hovering around $58 per barrel effectively mean lower revenues than those on which budget estimates were based, especially given Baghdad's continued adherence to OPEC+ quotas, which limit its ability to increase exports to compensate for the price decline. The paradox here is that Iraq finds itself caught between two opposing pressures: on the one hand, it needs a higher price to finance a massive payroll and chronically deficit-ridden infrastructure and essential services projects; on the other hand, the global economy is moving in a direction that reduces producers' ability to push prices to high levels without risking losing market share to competitors outside the OPEC+ framework. The imposition of a "maritime blockade" on a producing country like Venezuela further destabilizes the operating environment for other producers, even those not directly targeted. Iraq’s oil exits through the Gulf, passing through maritime routes that have long been under the microscope of regional and international tensions, from the Strait of Hormuz to the Arabian Sea. This makes any expansion of the maritime blockade model an indirect message to Baghdad about the need to consider the cost of major conflicts spilling over into the supply lines it depends on.
The need to prioritize the diplomatic track and strengthen energy security
Beyond these technical considerations, Trump’s decision raises a deeper question about the future of the rules of the game in energy markets. If it becomes possible to use naval forces to impose a single country’s will on the movement of oil tankers in areas far from its shores, this effectively expands the scope of sanctions from the realm of finance and trade to that of direct hard power. This compels oil-dependent countries to reassess their energy security systems, including diversifying their customers, export routes, and the types of contracts used in selling crude oil. For Iraq, which relies primarily on limited export outlets and a maritime infrastructure still under development, any international escalation in the use of a naval blockade serves as a reminder of the need to accelerate diversification projects. This includes completing the Faw port system and connecting it to new transport lines, or reconsidering alternative pipeline options that reduce dependence on a single route. In conclusion, Ahmed Askar says, “The next phase requires close monitoring of implementation developments and international reactions. Diplomatic solutions must prevail to prevent economic sanctions from escalating into an open and costly naval confrontation for all parties.” This conclusion puts the final stop: any slide of sanctions to the level of maritime confrontation will not remain confined to the Caribbean, but will have repercussions on all major energy corridors, especially the routes on which Iraq depends to export its oil and finance its economy.
Has the era of Iranian influence in Iraq come to an end?
seems that the famous saying of the British politician Winston Churchill, “There are no permanent friends or permanent enemies in politics, only permanent interests,” applies to the current state of political reality in Iraq.
The evidence for this statement is the sudden change in the compass of Iraqi politics towards rushing to gain the favor of the American side and trying to please it after it reached a complete conviction that the Iranian axis is no longer as strong as it was before the collapse of its arms in Syria and Lebanon and what that destruction and chaos could extend to Iraq.
Despite the attempts at stubbornness and obstinacy shown by this or that side in the American attempts to impose a new reality in Iraqi politics away from Iranian interference in Iraqi affairs, which has been held hostage for more than twenty years, the majority of the ruling parties have realized, after a period of intoxication that lasted more than two decades, that their situation has become threatened after the first signs of America’s weapons against them became the reduction of the amount of dollars sent to Iraq, which caused a shortage of cash liquidity and a delay in distributing the salaries of employees and retirees.
Former Iranian Foreign Minister Mohammad Javad Zarif’s remarks at the “Doha Forum 2025” that the armed groups referred to as Iran’s proxies in the region did not fire a single shot in defense of Iran’s interests in its last 12-day war with Israel, which is an indisputable fact when those factions relied on political slogans and verbal threats instead of direct confrontation, is conclusive evidence that Iran has begun to abandon its arms in Iraq, just as it abandoned its predecessors, the latest of whom was the Houthis, and reflects a new reality in Iraq in which armed militias are distancing themselves from their relationship with Iran and severing their ties for the sake of their own interests and spoils in power.
It can be said with certainty that most of the political forces that were previously loyal to Iran and complied with its wishes have begun to disavow their commitments and absolve themselves of any responsibility for any connection with the eastern neighbor that has long controlled the Iraqi file and the formation of its previous governments. This may be evident through the commitment of the armed factions in Iraq that are close to Iran to an “undeclared” truce with the United States for about a year, a pragmatism of interests and benefits, even if it was activated late.
It can be said that the situation has changed in the formation of the next Iraqi government after America decided to separate the Iraqi file from the Iranian one, according to an Iraqi political equation that tends to move away from Iranian influence.
Even the concept of the largest bloc, which meant that the winner would emerge from it with an agreement among its parties to form the next government, may face an American veto unless it is cleared of any Iranian or similar influence. Therefore, many social media sites, politicians' conversations, and talk show discussions are circulating about the mission of Mark Savaya, President Trump's envoy to Iraq, to establish a new equation in the Iraqi political reality, the title of which is far from Iranian influence and close to the American desire.
On the other hand, it is naive to say that Iran will give up its influence in Iraq so easily. Abu Ali al-Askari, spokesman for Kataib Hezbollah, warned Shiite leaders against receiving or dealing with Mark Savaya, reflecting the reality of Iranian influence in Iraqi affairs and confirming that escaping Iran requires difficult decisions.
It is a difficult choice for Iraq to make in order to protect its interests from proxy wars
Forming the new government will go through obstacles, the first of which is that Iraqis must make their decisions independently and think about the future of their country as others think about the future of their countries. Is that possible?
Iraq’s new parliament to convene first session on December 29
kurdish news
Iraq’s incoming parliament is scheduled to hold its first session on December 29, according to a decree issued Tuesday by the country’s president. The session will mark the first convening of the new legislature since Iraq held its key parliamentary elections in mid-November.
In a statement, the Iraqi presidency said President Abdul Latif Rashid issued a decree stipulating that “the elected Council of Representatives, in its sixth term, shall convene on Monday, December 29.”
The decree “takes effect from the date of its issuance and publication in the Official Gazette of Iraq (al-Waqa’i al-Iraqiya),” the statement added,
Iraq held early legislative elections on November 9, followed by general voting on November 11. Final results were announced in mid-November.
The country’s top judicial authority, the Federal Supreme Court, on Sunday ratified the final results of the vote, saying the elections “met all constitutional and legal requirements.”
The ratification followed last week’s announcement by the Electoral Judicial Panel - an affiliate of Iraq’s highest administrative authority overseeing the judiciary, the Supreme Judicial Council - that it had concluded its review of “all appeals submitted regarding the election results.”
The development comes as political negotiations over key positions in the next cabinet gain momentum.
Under Iraq’s post-2003 constitution, the new parliament must convene with a two-thirds quorum in a session led by the eldest legislator, who serves as acting speaker. Parliament then elects a speaker, followed by a president through a secret ballot - requiring a two-thirds majority in the first round or a simple majority in a runoff.
The largest parliamentary bloc then nominates a prime minister-designate, who is tasked by the new president with forming the next government.
Prime Minister Mohammed Shia' al-Sudani chairs a special meeting on the oil and gas sectors.
Prime Minister Mohammed Shia Al-Sudani chaired a special meeting on Wednesday concerning the oil and gas sectors, in the presence of the Ministers of Oil and Finance, a number of advisors, and senior staff from the Ministry of Oil and SOMO.
His Excellency affirmed the government's intention to review the financial and economic aspects and raise the efficiency of the Ministry of Oil's sectors, as they are the main source of revenue for the state's general budget.
The meeting discussed plans to develop crude oil production and exports, as well as efforts to achieve self-sufficiency and export petroleum products, and to determine the rates of local consumption.
The meeting addressed the localization of industries necessary for the oil sector, and the development of national capabilities in the public and private sectors in the fields of drilling, extraction, mechanical engineering, and others, in order to rely on national personnel in these aspects
"The truth of the matter is that the financial crisis is not something that emerged today. We warned at the end of last year—specifically—that there were early signs of a deep financial crisis that would strike the Iraqi economy. This crisis is linked to two main issues: the expectation of a sharp drop in oil prices during 2025, and also excessive spending—unjustifiably large public spending in Iraq.That's right. The Iraqi budget was built on an assumed oil price of $70, but in reality it was based on $84, because part of the projected deficit—about a quarter of it—was supposed to be covered by an expected rise in oil prices. That didn't happen.
But our warnings didn't find listening ears. Government officials and the advisory team kept insisting that the financial situation was good, secure, and stable, with no danger to salaries, social welfare, or the Iraqi economy as a whole—even though the oil price curve was heading sharply downward. Brent crude lost 20% of its real value this year, and West Texas Intermediate lost 22%.As a result, oil revenues in Iraq dropped significantly, to the point where they no longer suffice—especially in the past month and this current month. The situation will worsen further because last month we sold exports at $64 per barrel—more than 3.55 million barrels per day, including 188,000 barrels from Kurdistan exports. At that price, the billions of dollars generated barely cover salaries and social welfare.
But today we're talking about $59—or effectively $57 for Iraq. This will create a gap between actual expenditures and planned ones. Iraq now needs no less than 3 to 4 trillion Iraqi dinars per month.That's why we see that the recent measures are not an economic program at all—they're just a set of patchwork fixes. Even if all of them are implemented, they won't save the Iraqi economy from the predicament, given the size and depth of the crisis and the future outlook—especially in 2026—where oil prices are expected to fall further due to weak market fundamentals, particularly the large oversupply of oil compared to clearly weak global demand.
There's also the possibility that geopolitical risks will be removed from oil pricing if a peace agreement is reached between Russia and Ukraine. In that case, oil prices could collapse to $50 levels.I believe the economic situation in Iraq is not reassuring at all. The financial situation is very bad. The measures came far too late, and they are not part of a comprehensive reform package—they're timid, piecemeal steps.Moreover, what does the salary scale have to do with the financial crisis? Why wasn't it addressed during the time of financial surplus three years ago?
The country has now become in dire need of real economic reform to save it. As you rightly pointed out in your introduction, unfortunately, it's always the poor, fixed-income earners, and vulnerable groups who end up paying the social cost of reform—the social cost of fixing what successive economic policies have ruined in Iraq.
Those policies failed to benefit from oil surpluses either to build a diversified economy capable of creating social safety nets (as all oil-producing countries do), or to invest those funds in diversifying the Iraqi economy so as to reduce the impact of falling oil revenues.The economy that existed, still exists, and continues to depend heavily—more than 90% of public revenues come from oil. In fact, the entire economic life in Iraq depends on oil—even non-oil revenues indirectly depend on oil money."
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