Iraq’s Central Bank Governor Ali al-Alaq revealed that the nation’s total public debt has climbed close to $150 billion, signaling rising fiscal pressure and the need for urgent economic reforms.
In a written statement submitted to Parliament through MP Raed al-Maliki, al-Alaq warned that Iraq’s budget deficit has grown too large to be financed through additional borrowing or the sale of government bonds. He emphasized that this growing gap between spending and revenue poses serious risks to financial stability if not addressed soon.
Despite these challenges, al-Alaq clarified that Iraq continues to have unrestricted access to its oil revenues through the US Federal Reserve. He added that the country currently holds around $11 billion in US Treasury bonds, which reflect part of Iraq’s foreign assets and reserves.
According to the Iraq’s Central Bank latest data, domestic debt rose by 2.9% in July compared to June and surged by 16% year-on-year. The increase highlights Iraq’s growing reliance on internal borrowing to cover government expenses, including salaries, subsidies, and development projects. Economists have warned that this trend could undermine long-term financial stability if spending continues to outpace revenue growth.
In a separate development, MP Hadi al-Salami announced that the Federal Supreme Court has requested Parliament to summon Prime Minister Mohammed Shia al-Sudani. The summons concerns delays in submitting the 2025 budget tables and the country’s final accounts, a setback that could further complicate Iraq’s fiscal planning and debt management.
Observers believe that Iraq must adopt stricter fiscal discipline, diversify its income sources beyond oil, and enhance transparency in public spending. Without these measures, the growing debt burden could limit the government’s ability to invest in essential services and maintain economic stability.