IMF Sounds Alarm Bell Over 'Economic Collapse': Iraq Needs Reform, Not Slogans
Friday, July 11, 2025 | Economic Number of readings: 90 Baghdad/ NINA / The International Monetary Fund (IMF) warned of a dangerous financial path that threatens economic stability in Iraq, given its excessive reliance on oil revenues and rapid expansion in current expenditures, most notably salaries and pensions, amid a near-total stagnation in the non-oil sectors. This places the country at a critical economic and political crossroads.
In a detailed report, the IMF indicated that the growth rate of the non-oil sector in Iraq declined sharply from 13.8% in 2023 to an estimated 2.5% in 2024, indicating a gradual contraction of real economic activity outside of oil.
According to the report, the fiscal deficit is expected to reach 7.5% of GDP in 2025, before jumping to 9.2% in 2026, driven by lower revenues and higher expenditures, particularly in the salaries and pensions file, which drain most of the budget's resources, in the absence of any corresponding production. /End https://ninanews.com/Website/News/Details?key=1240196
"the government's move has numerous benefits, most notably its contribution to absorbing liquidity
and eliminating financial hoarding, as well as strengthening the principle of monetary sovereignty." "announced that the national electronic payment card project it launched is a local option and exclusively in dinars" "Issuing the national payment card is a principle implemented in all countries around the
world. It allows its holder to make payments using electronic cards within the country in Iraqi dinars, under the supervision of the monetary authority and under the principle of
monetary sovereignty, without the need to go through external oversight systems."
Iraqi ministerial committee on Erbil-Baghdad budget issues holds first meeting
Iraq’s newly formed ministerial committee tasked with resolving outstanding disputes between Erbil and Baghdad held its first meeting on Wednesday, focusing on key financial and energy issues, including oil exports, domestic consumption, and public sector salaries in the Kurdistan Region.
The meeting, chaired by Deputy Prime Minister and Minister of Planning Mohammed Ali Tamim, brought together federal and Kurdistan Regional Government (KRG) representatives to address stalled budget transfers and oil obligations, according to a planning ministry statement.
“A review of the two papers submitted by the federal government and the [Kurdistan] Region, where both papers addressed a number of vital topics, foremost among them the oil export file and its regulatory mechanisms, the volume of local consumption of oil products, as well as the region's delivery of the federal treasury's share of non-oil revenues, in addition to discussing the localization of Kurdistan Region employees' salaries” were discussed, the statement said.
On Monday, a senior KRG delegation arrived in Baghdad to resume talks with federal officials over the prolonged financial dispute, which has led to repeated salary delays in the Kurdistan Region.
The committee was established on Tuesday following the visit, per a directive by Iraqi Prime Minister Mohammed Shia’ al-Sudani.
The planning ministry said the committee stressed “the importance of continuing technical and administrative discussions regarding these files with the aim of reaching quick, fair, and realistic solutions and treatments that guarantee the rights of Kurdistan Region employees, similar to their colleagues in the rest of the Iraqi provinces, within the framework of the state's unified financial policy.”
Tensions between Erbil and Baghdad flared in late May when Iraq’s federal finance ministry halted all budget transfers to the KRG, including payments for public employee salaries. The ministry claimed the KRG had exceeded its 12.67 percent share of the 2025 federal budget and failed to deliver its designated share of oil to SOMO.
The situation has been exacerbated by the ongoing suspension of oil exports through the Iraq-Turkey pipeline, which has remained offline since March 2023 following an international arbitration ruling.
The committee is tasked with aligning both sides’ demands and drafts to pave the way for a formal agreement. link
Article: "Al-Hassan from Karbala: Iraq is not a poor country and is open to foreign investment."
Quote: "Iraq is not a poor country, but rather a country of goodness, with trained, educated and cultured human resources, not only at home but also abroad.
Iraq has scientists of both genders, even at NASA, and they are distinguished.
He added that Iraq has distanced itself from the surrounding political problems, and in light of that, we only expect to see a strong Iraq with a regional and global standing."
Commerce: Implementing a package of qualitative initiatives to boost the national economy.
The Ministry of Trade announced, on Friday, the implementation of a package of qualitative initiatives to advance the national economy and stimulate sustainable growth.
Ministry spokesman Mohammed Hanoun said, "The Ministry, in coordination with the Private Sector Development Council, has prioritized creating a stable and investment-friendly economic environment by addressing challenges and facilitating procedures for investors and entrepreneurs in line with the requirements of the national economy."
He added, "Based on the Iraqi government's directives to support the business environment and enhance partnerships between the public and private sectors, the Ministry of Trade, through the Private Sector Development Council and the Private Sector Development Department, continues to implement a package of qualitative initiatives and effective measures aimed at advancing the national economy and stimulating sustainable growth."
He explained that "the measures taken include strengthening channels of joint dialogue between representatives of the public and private sectors to develop practical solutions to the challenges facing the
business environment, reviewing and updating commercial and regulatory legislation with the aim of simplifying procedures and stimulating local and foreign investment, in addition to launching programs to support small and medium enterprises and providing financing and training packages to support entrepreneurs."
Hanoun pointed to the possibility of supporting digital transformation and developing electronic services to facilitate commercial and investment transactions and enhance the principles of transparency and economic governance by publishing periodic reports on economic performance indicators and the business environment, creating an appropriate investment, legal, and financial climate for major partnerships, and encouraging quality investments in vital sectors. He also stressed the importance of working hard to improve Iraq's ranking in international business environment indicators by implementing global best practices in facilitating the establishment of companies and protecting investors.
Hanoun affirmed that "the Ministry of Trade is committed to supporting the private sector and empowering it to be a key partner in building a diversified and sustainable economy and achieving comprehensive economic development that positively impacts citizens' lives." He called for continued cooperation and integration between all state institutions and the private sector to create a competitive economic environment that contributes to stimulating growth and providing job opportunities. link