⚠️💸 Borrowing from Iraq’s Central Bank Could Spark a Financial Crisis, Expert Warns! 🚨🇮🇶
🗣️ Samir Al-Nusairi sounds the alarm on Iraq’s risky fiscal strategy: borrowing from the Central Bank to cover rising budget deficits could destabilize the entire economy. Here’s what you need to know:
🔍 Key Highlights:
💰 Iraq's economy remains heavily oil-dependent, with oil making up 93% of revenues and nearly 60% of GDP.
📉 Falling oil prices + lack of income diversification = chronic budget deficits (especially in 2023–2025).
🏦 The government may again borrow from the Central Bank by rediscounting treasury bonds—despite owing 85 trillion IQD in domestic debt already!
📊 The projected 2025 oil revenue (~117 trillion IQD / $90.9B) is unlikely to be met, adding more deficit pressure.
🧯 The Central Bank’s objectives—controlling inflation (1–1.5%), managing money supply, and maintaining reserves ($104B + 167 tons of gold)—are at risk if more currency is issued.
📈 Borrowing could increase currency in circulation (already over 99 trillion IQD, 80% outside the banking system), triggering higher inflation and weakening foreign reserves.
📉 The budget deficit may exceed 63 trillion IQD, or 30% of GDP, while the legal cap is only 3% per Iraq’s Financial Management Law.
🔓 This puts the Central Bank’s independence in jeopardy, dragging it into political cycles and undermining its core mission: economic stability.
🧠 Final warning: Central banks are banks of stability — not ATMs for government overspending.
🔗 Full article: economy-news.net/content.php?id=58589
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