Experts: Iraq’s finances at risk from oil plunge, Trump’s tariffs, 6 APRIL

Experts: Iraq’s finances at risk from oil plunge, Trump’s tariffs

Shafaq News/ Iraq risks falling short on public sector salaries due to a sharp drop in global oil prices and the impact of new US tariffs that threaten state revenues, several economists warned.

Global oil prices have declined sharply, with Brent crude falling to $65 per barrel and US crude to $62, following increased OPEC+ production and US President Donald Trump's sweeping tariffs on foreign goods.

Economist Hilal Al-Taan told Shafaq News that 93% of Iraq’s budget is tied to oil, and any significant drop threatens revenue stability. He urged the government to revive the agricultural and industrial sectors to reduce imports and limit the outflow of hard currency,

 calling for the identification and removal of “ghost employees” from state payrolls and cutting unnecessary expenditures.

To avoid a crisis, he suggested internal borrowing from banks or the central bank. “If that’s not enough, Iraq will be forced to seek external loans, risking renewed debt burdens,” he pointed out.

Prime Minister Mohammed Al-Sudani’s financial adviser Mudhir Saleh revealed that salary-related spending accounts for about 65% of Iraq’s total budget, with wages alone costing around 62 trillion dinars ($47.3 billion) annually.

“Trump’s tariffs reflect deeper US inflation and could trigger a global recession, which will push oil demand and prices even lower,” he stated, noting that while Iraq can manage salaries with oil at $50–55 per barrel, anything below that would severely strain public finances and delay investment projects.