President Donald Trump has ignited a firestorm in the Middle East with a dramatic executive order that abruptly ends Iraq's waver to buy gas from Iran.
This high stakes move intends to choke Iran's economy and its nuclear ambitions is sending shock-waves through Iraq's fragile energy sector and threatening to plunge the country deeper into political and economic chaos...
Baghdad is scrambling for alternatives. Financial transactions are also under siege. Washington has cut off Iran's access to Iraq's financial system...
leaving Iraq desperate for a workaround including a potential shift to Russia's Mir payment system. Iraq is deeply concerned the sitting president will place more sanctions on the country if they do not comply.
Iraq passed an expansionary three-year budget program in 2023, which will likely lead to rising general government debt.
The country has a history of under-spending on budgetary targets but heightened regional tensions alongside parliamentary elections in late 2025 will pressure fiscal finances.
Despite OPEC+ production cuts continuing into at least the first half of 2025, we expect Iraq's sizable oil export volumes will support external surpluses and foreign exchange reserves remaining in excess of $100 billion over 2025-2028.
We therefore affirmed our 'B-/B' ratings on Iraq. The outlook is stable. link
More than one person told me that for a short time on the forex they saw the dinar at around one US dollar. I think this may be a little more testing…they have not opened it up for exchange yet…. Don’t panic…I don’t think this is the rate…but if it is I will take it and be happy..
.So this puts one IQD just under one US dollar.
I am hearing a lot of fun stuff from Iraq and from groups. Expectations are through the roof right now...I am almost afraid to tell you all how excited I am for the next few days and the next week or two. This roller coaster is bad enough…but I am quite literally bouncing today. I hope and pray we are through by next Saturday.
Transport Reveals The Development Plan In Iraqi Airports
Money and business Economy News – Baghdad The Ministry of Transport revealed, today, Sunday, its development projects in Iraqi airports, most of which aim to rehabilitate the airports’ infrastructure, while indicating that the plan includes 26 projects in Baghdad Airport.
The ministry stated in a statement received by "Al-Eqtisad News" that "Baghdad International Airport has a comprehensive development plan that coincides with the investment portfolio of the International Finance Corporation and its three options," indicating that "this plan includes 26 projects in two phases."
The statement added that "the first phase includes airport infrastructure rehabilitation projects, consisting of 16 projects, nine of which are on the company's operating budget, and seven on the investment budget.
" The statement continued, "The second section contains ten projects, all of which are funded from the investment budget, in addition to the existence of projects under study, most notably the redesign of Iraqi airspace and the alternative building for air navigation, as well as the air traffic management system."
The statement indicated that "the airports administration has started the airport infrastructure rehabilitation projects, including the green areas and gardens expansion project, where the contract was signed and actual work began, as well as the roof and floor rehabilitation project in the Babylon and Samarra halls, which has reached 22% completion."
Regarding the air inspection project, the statement said, "There are navigation devices on the runway and a report was received from the New Zealand company Radiola regarding confirming the safety of all landing devices, and thus we can complete our development plans for Iraqi airspace."
The statement noted that "the General Company for Airports and Air Navigation Management has expanded the airspace for civil aviation at the expense of areas that were militarily prohibited, which allowed an increase in the number of aircraft crossing and their flow from the airspace of countries at a rate of 600 to 650 aircraft per day."
The statement explained that "there will be an installation of the ILS system within the automatic landing project, in addition to the system installed at Baghdad International Airport since 2005-2006," noting that "within the infrastructure rehabilitation projects, the contract was completed with the global company Indra, which specializes in the aviation sector."
The statement continued, "The rehabilitation projects also include the lighting or decoration project, as it has been referred to one of the companies and we are also in the process of signing this contract,"
stressing that "the revenues of the General Company for Airports and Air Navigation Management have increased at a very high rate, as they were 4 billion dinars, while they have now reached 15 billion per month."
He added, "As for the rest of the Iraqi airports, work is continuing on the Nasiriyah Airport project, as most of the navigational devices have arrived from international sources such as ENDRA, which specializes in the aviation sector.
As for Mosul Airport, 82% of its devices have been equipped, most of them from international French companies, regarding the installation of radar and ILS, at the airport, which is scheduled to open before the end of this year."
Regarding Basra International Airport, the ministry stated in its statement that it "intends to contract with international companies to purchase two radars; one to be installed in the western region of Iraq, and the second at Basra Airport." https://economy-news.net/content.php?id=52634
🔗 Impact of U.S. Sanctions: Recent sanctions imposed by the U.S. restrict Iran’s access to Iraq’s financial system, altering regional financial dynamics.
💵 Iraqi Dinar Revaluation: The prospect of the Iraqi dinar revaluation is becoming more tangible due to coordinated efforts between the U.S. and Iraqi government.
🏦 Banking Infrastructure Reforms: The Iraqi government is modernizing its outdated banking infrastructure to facilitate better access to financial services.
🚀 Financial Inclusion: Improvements in banking services could lead to enhanced financial inclusion for millions of Iraqis, promoting economic growth.
🏢 Entrepreneurship Growth: Better access to banking facilities can empower small businesses and entrepreneurship, crucial for Iraq’s economic development.
🌍 Regional Economic Positioning: Iraq’s financial reforms are positioning it as a potential economic powerhouse in the Middle East.
🔍 Consumer Confidence: Ongoing reforms are helping to restore public trust in the financial system, making it more reliable and efficient.
Key Insights
🌐 Geopolitical Dynamics: The interaction between Iraq and Iran is complex, particularly in light of U.S. sanctions. By blocking Iran’s ability to leverage Iraq’s financial system, the U.S. is indirectly promoting Iraq’s financial independence, which could stabilize the country’s economy in the long term. This geopolitical maneuvering signifies a strategic pivot that could redefine financial alliances in the region.
📉 Revaluation of the Dinar: The proposed revaluation of the Iraqi dinar has been a long-standing topic of speculation. Recent insights suggest that with the U.S. backing and the Iraqi government’s proactive reforms, the dinar may be poised for a substantial value increase. Such a revaluation could enhance Iraq’s economic stature, instilling confidence among investors and citizens alike.
🔄 Economic Transformation: Iraq is undergoing a systemic transformation, moving away from an outdated financial framework to a more modern and efficient system. This transformation is crucial for attracting foreign investment, fostering economic stability, and reducing reliance on informal financial channels, which have historically undermined economic growth.
📈 Access to Financial Services: The government’s initiatives to enhance banking infrastructure are vital for ensuring that ordinary citizens have access to essential financial services. As more Iraqis gain access to banking, the potential for increased savings, loan accessibility, and overall financial literacy will rise, driving economic empowerment.
💡 Entrepreneurial Ecosystem: Financial inclusion is expected to spur entrepreneurship in Iraq. With improved access to credit and banking, aspiring entrepreneurs can secure the necessary funding to start or grow their businesses. This approach not only promotes individual economic stability but also contributes to job creation and overall economic vitality.
🔒 Consumer Confidence Restoration: Trust in the financial system is critical for economic recovery and growth. As the Iraqi banking system becomes more efficient and transparent, public confidence is likely to increase. This restored confidence could lead to higher levels of participation in the formal financial sector, further solidifying Iraq’s economic foundation.
🌟 Long-term Economic Prospects: The cumulative effects of these reforms indicate a positive trajectory for Iraq’s economy. If the current pace of reforms continues, Iraq could emerge as a significant economic player in the region. The ongoing modernization efforts are not only aimed at improving immediate financial conditions but also at securing long-term economic sustainability and growth.