Iraq’s Debt Exceeds $160Bn

Displaced Iraqis collect their belongings at Hammam Al-Alil camp, south of Mosul, Iraq | Photo: REUTERS
Displaced Iraqis collect their belongings at Hammam Al-Alil camp, south of Mosul, Iraq | Photo: REUTERS
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Iraq’s Debt Exceeds $160Bn

Displaced Iraqis collect their belongings at Hammam Al-Alil camp, south of Mosul, Iraq | Photo: REUTERS
Displaced Iraqis collect their belongings at Hammam Al-Alil camp, south of Mosul, Iraq | Photo: REUTERS

Iraq’s debt has exceeded $160 billion after the fiscal deficit law was approved, while the foreign public debt alone ranges between $60-70 billion.

MP Abdul Hadi al-Saadawi, member of the Iraqi parliament’s finance committee, said on Sunday that the majority of the country’s debt is external.

According to previous statements in early November, Finance Minister Ali Abdul Amir Allawi said Iraq’s foreign debt is estimated between $60 and $70 billion, while the internal debt amounts to $100 billion.

This comes amid parliamentary warnings from the government’s borrowing policy, which would eventually lead to bankruptcy.

Allawi explained that half of this amount was inherited and the other was added after 2003 for various purposes, including project financing.

The financial crisis suffered by Iraq is the result of the decline in oil prices and the consequent reduction in production, which affected its revenues, Allawi noted, adding that the reduction in oil exports has also caused an increase in the dues of oil contracts and licenses companies.

This has prompted the Finance Ministry to request the Iraqi parliament to issue an internal borrowing law with a 41 trillion dinars ceiling to reduce the deficit in salaries and expenses, such as the import of electricity and fuel, foreign debt, and others.

Allawi affirmed the new loan will cover salaries and expenses for the remainder of 2020 and the first two months of 2021.

He said the current government faced this crisis without any financial liquidity. For this reason, it can only rely on internal borrowing for the short term.

He further noted that the foreign borrowings, which amounted to $5 billion shall be allocated to finance projects.

Allawi warned that the monthly revenues generated from exporting oil, along with the funds in his ministry, are not sufficient to cover the salaries of all employees.

The Finance Ministry has repeatedly warned that the government’s current revenues are insufficient to meet current expenditures in light of low oil prices and Iraq’s commitment to the decisions taken by the Organization of Petroleum Exporting Countries (OPEC) and its allies on reducing oil production.



IMF Eyes Revised Global Forecast, but Warns Trade Tensions Still Cloud Outlook

A hazy view of the skyline in Toronto, Ontario, Canada, July 14, 2025. REUTERS/Carlos Osorio.
A hazy view of the skyline in Toronto, Ontario, Canada, July 14, 2025. REUTERS/Carlos Osorio.
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IMF Eyes Revised Global Forecast, but Warns Trade Tensions Still Cloud Outlook

A hazy view of the skyline in Toronto, Ontario, Canada, July 14, 2025. REUTERS/Carlos Osorio.
A hazy view of the skyline in Toronto, Ontario, Canada, July 14, 2025. REUTERS/Carlos Osorio.

The International Monetary Fund warned on Friday that risks related to trade tensions continue to cloud the global economic outlook and uncertainty remains high despite some increased trade and improved financial conditions.

IMF First Deputy Managing Director Gita Gopinath said the fund would update its global forecast later in July given "front-loading ahead of tariff increases and some trade diversion," along with improved financial conditions and signs of continued declines in inflation.

In April the IMF slashed its growth forecasts for the United States, China and most countries, citing the impact of US tariffs on imports now at 100-year highs and warning that rising trade tensions would further slow growth.

At the time, it cut its forecast for global growth by 0.5 percentage points to 2.8% for 2025, and by 0.3 percentage points to 3%. Economists expect a slight upward revision when the IMF releases an updated forecast in late July.

According to Reuters, Gopinath told finance officials from the Group of 20 major economies who met this week in South Africa that trade tensions continued to complicate the economic outlook.

"While we will update our global forecast at the end of July, downside risks continue to dominate the outlook and uncertainty remains high," she said, in a text of her remarks.

She urged countries to resolve trade tensions and implement policy changes to address underlying domestic imbalances, including scaling back fiscal outlays and putting debt on a sustainable path.

Gopinath also underscored the need for monetary policy officials to carefully calibrate their decisions to specific circumstances in their countries, and stressed the need to protect central bank independence. This was a key theme in the G20 communique released by finance officials.

Gopinath said capital flows to emerging markets and developing economies remained sluggish, but resilient, in the face of increased policy uncertainty and market volatility. For many borrowers, financing conditions remained tight.

For countries with unsustainable debt, proactive moves were essential, Gopinath said, repeating the IMF's call for timely and efficient debt restructuring mechanisms.

More work was needed on that issue, including allowing middle-income countries to access the G20's Common Framework for Debt Restructuring, she said.