Advisor to Al-Sudani: The internal debt exceeds 80 trillion dinars and there is a plan to gradually extinguish it
Advisor to Al-Sudani: The internal debt exceeds 80 trillion dinars and there is a plan to gradually extinguish it
2025/01/19
The economic advisor to the Prime Minister, Mazhar Muhammad Salih, confirmed that Iraq’s internal debt exceeded 80 trillion dinars, while indicating that there is a well-thought-out plan to gradually extinguish it in coordination between the fiscal and monetary policies.
In precise details, Saleh explained via {Euphrates News} that: “The main dilemma that the country has faced over the past years was the disruption of a number of development projects that were inherited by the three-year general budget under Law No. 13 of 2023, which was designed based on an average price of a barrel of oil of $70, and exports not exceeding 3.4 million barrels per day.”
He added, “These exports were reduced by about 200,000 barrels per day under the OPEC Plus agreement, which necessitated resorting to internal borrowing again to implement stalled strategic projects that had previously been halted due to financial, security and health crises.”
Saleh pointed out that “the budget stipulated an annual borrowing of 64 trillion dinars to address the potential deficit,” noting that “the Central Bank of Iraq retains more than 50% of the domestic debt within its asset portfolio, with high coverage in foreign currency, which ensures that there are no inflationary effects resulting from this debt.”
He explained that “remittances and bonds, as debt instruments, represent domestic assets that were discounted by the monetary authority, which caused an increase in monetary issuance; however, they are fully covered by foreign currency, despite the rise in the monetary base and general liquidity components in the economy.”
Saleh concluded his statement by emphasizing that “the annual inflation levels in Iraq are still under control, reaching less than 3% for the year 2024,” stressing that “there is a well-thought-out plan to extinguish the domestic debt and control its growth rates according to the criteria of financial reinforcement during the coming years.”
alforatnews.iq
