Economist: Financial debts have caused a liquidity crisis in government banks and the pension fund.
Economist: Financial debts have caused a liquidity crisis in government banks and the pension fund.
2025/04/16
Economic expert Salah Nouri confirmed on Wednesday the existence of a liquidity crisis at a number of government banks, including Rafidain and Rashd banks, in addition to the Trade Bank of Iraq and the Iraqi Employees’ Retirement Fund. He attributed the reason to the accumulation of internal debts at the Ministry of Finance as a result of its reliance on domestic borrowing to cover the budget deficit over the past years.
Nouri told Al Furat News Agency, “There is a liquidity crisis plaguing government banks and the pension fund, as a result of the Ministry of Finance’s mounting internal debts to cover the budget deficit for several consecutive years.”
He added that “this crisis has directly impacted these institutions’ ability to meet their obligations,” while noting that he “does not have precise figures that can confirm or deny the statements made by several MPs on this matter, due to the Ministry of Finance’s directive not to provide government banks with any financial information.”
In recent years, the Iraqi Ministry of Finance has relied on a policy of domestic borrowing to cover recurring deficits in the public budget, by borrowing from government banks and the employees’ pension fund.
This approach, although a temporary measure to address operating expenses, has led to the accumulation of massive debts for the Ministry of Finance, directly impacting the liquidity of lending financial institutions.
alforatnews.iq
