Iraq’s growing domestic debt continues to expand as government borrowing increases to support national spending. The Central Bank of Iraq confirmed a new rise in internal debt levels by late September. Economists believe Iraq’s growing domestic debt shows ongoing challenges in balancing public finances.
According to new financial data, Iraq’s total domestic public debt climbed to 90.6 trillion dinars by the end of September. This figure represents a steady increase from the previous month’s total of 90.1 trillion dinars. The data also shows a strong yearly growth trend. Compared to 2024, domestic debt rose by about nine percent, and it increased by nearly 28 percent since 2023. These numbers reveal how Iraq’s growing domestic debt continues to place pressure on financial stability.
The Central Bank explained that the main reason behind this rise lies in treasury bond activity. Treasury bills expanded by one trillion dinars within a single month, moving from 49.4 trillion to 50.4 trillion dinars. This increase highlights the government’s continued use of internal borrowing to cover expenses and projects.
However, not all indicators moved upward. Loans from financial institutions slightly decreased from 14.4 trillion to 14.3 trillion dinars. Likewise, the Ministry of Finance managed to reduce its debt from 2 trillion to 1.5 trillion dinars. Even with these minor declines, Iraq’s overall borrowing trend still points upward.
Economic experts argue that this pattern signals deep structural issues in Iraq’s financial system. They say Iraq’s growing domestic debt reflects the government’s heavy dependence on internal credit rather than foreign loans. This strategy helps limit external debt but raises concerns about domestic liquidity and inflation risks.
Furthermore, analysts warn that constant borrowing can strain Iraq’s banking sector. As more funds move toward government bonds, fewer resources remain available for private investment. This shift could slow down economic growth and limit new job opportunities. Many experts urge the government to strengthen revenue collection and diversify the economy to reduce debt dependency.
Meanwhile, officials maintain that internal borrowing remains necessary to support development programs and stabilize cash flow. They insist that treasury bonds offer safe financial instruments for local investors and banks. Yet, without better fiscal control, Iraq’s growing domestic debt could challenge long-term sustainability.
In conclusion, Iraq faces a tough balancing act between financing its growth and managing rising debt. Stronger planning, higher efficiency, and broader income sources can help the country achieve stability. For now, Iraq’s growing domestic debt remains one of the country’s most urgent financial concerns.