The Iraq credit market experienced a slight downturn by the end of March 2025. The Central Bank of Iraq reported a drop in total credit, with figures showing a decrease compared to the previous month. This change affects lending to both public and private sectors, marking a shift in Iraq’s financial activity.
According to official figures, total credit dropped to 71.288 billion Iraqi dinars by March’s end. In February, the number stood higher at 73.188 billion dinars. This means Iraq’s credit market shrank by 2.78% within one month. This trend may reflect tighter lending conditions or slower demand for loans.
The Iraq credit market distributes credit to three key areas: the central government, public institutions, and the private sector. Of the total amount, 24.738 billion dinars went to the central government. Public institutions received 2.489 billion dinars. The largest portion, 44.061 billion dinars, went to the private sector.
These numbers reveal that private businesses continue to rely heavily on credit. The Iraq credit market supports small and large enterprises, helping them invest, grow, and manage short-term needs. A slight drop in overall lending might signal reduced borrowing, perhaps due to market caution or fewer large-scale projects.
Lending to the central government still plays a major role. These funds support infrastructure, salaries, and essential services. A slowdown in government borrowing could reflect completed spending cycles or delayed budget approvals. Public institutions, while receiving a smaller share, still rely on credit for operations.
The Iraq credit market operates through agreements where borrowers take funds with a promise to repay. These contracts often include interest and set payment schedules. Lenders assess risk before extending loans to ensure stability in the financial system.
Although the March numbers show a slight dip, experts believe the overall trend remains steady. Fluctuations in monthly credit levels are normal in any growing economy. Investors and financial planners will continue watching these trends closely to make informed decisions.
The Iraq credit market remains a vital part of the country’s economic engine. Whether supporting businesses, funding public services, or aiding government operations, credit shapes daily financial movement across Iraq.