An economist reveals the real reasons behind the financial deficit and the shortage of cash liquidity.
An economist reveals the real reasons behind the financial deficit and the shortage of cash liquidity.
8-2-2026
Information / Baghdad
On Sunday, economist Faleh al-Zubaidi revealed the real reasons behind the financial deficit and cash shortage facing the Iraqi government, while issuing a strong warning against resorting to external borrowing.
Al-Zubaidi told Al-Maalomah News Agency that “the government is currently suffering from a clear shortage of financial liquidity as a result of the sharp decline in oil revenues, which came as a direct consequence of the closure of the strategic Strait of Hormuz.”
He added that “85% of Iraq’s oil exports depend entirely on passing through the Strait of Hormuz, while the remaining percentage flows through the Turkish port of Ceyhan,” explaining that “this stoppage has temporarily paralyzed the government’s ability to provide the necessary cash liquidity,” noting that “this shortage will not last long in light of the indicators of political and security calm in the region, especially after Iran’s agreement to a ceasefire, which means that financial revenues will return to normal as soon as the strait is reopened.”
Al-Zubaidi explained that “the government has effective local solutions, which are the issuance of bonds and discounting of remittances through the Central Bank, through the Ministry of Finance issuing short-term bonds and selling them to the Central Bank of Iraq.”
He warned of the “dangers of Baghdad resorting to external borrowing from international entities,” stressing that “these entities will impose unfair and harsh conditions, including a strict repayment schedule, exorbitant interest rates, and a dangerous clause allowing them to seize and confiscate some Iraqi state assets in case of default.”
almaalomah.me
