Central Bank: External debt does not exceed $13 billion, and the deficit is lower than planned.
Central Bank: External debt does not exceed $13 billion, and the deficit is lower than planned.
2025-10-19 03:22
Shafaq News – Baghdad
The Central Bank of Iraq confirmed on Sunday that Iraq’s external debt does not exceed $13 billion, noting that the actual deficit is lower than planned.
The bank stated in a statement received by Shafaq News Agency, “In the context of financial transparency and to clarify what is included in the public debt and deficit data, the Central Bank of Iraq would like to clarify what was reported in the media that the planned deficit in the three-year general budget law approved by the House of Representatives for the years (2023, 2024, 2025) amounted to 191.5 trillion dinars.”
He added, “While the actual deficit for the three years in question amounted to 35 trillion dinars, it was covered internally through bonds and transfers, in accordance with the provisions of the budget law.” He explained that “actual borrowing amounted to 18.2% of the planned deficit stipulated in the budget law, reflecting the high level of coordination between the government and the Central Bank of Iraq in controlling public debt and preventing it from reaching the high levels stipulated in the budget law.”
Regarding outstanding foreign debts, the statement emphasized that they “do not exceed $13 billion after excluding outstanding and unclaimed debts from the former regime.” Iraq has not defaulted on any obligations, maintaining an excellent financial reputation regionally and internationally in this regard.
He explained that “the domestic debt, amounting to 91 trillion dinars, represents 56 trillion dinars accumulated by the end of 2022, and the additional amounts represent 35 trillion dinars of debt for the years (2023, 2024, and 2025). Most of the domestic debt is within the government banking system.”
He stressed that “given the government’s accounts and deposits in state-owned banks, specialized committees and international consulting firms are working to convert a portion of these debts into investment vehicles within a national fund to manage domestic debt, with the aim of transforming obligations into investment opportunities.”
According to the statement, “the ratio of public debt to GDP did not exceed 43%, which, according to internationally recognized classifications, is considered moderate and within safe limits, and does not constitute a burden on the economy.”
He added that he “is working to present a comprehensive vision for financial sustainability for the coming years, supporting the government’s comprehensive reform efforts to diversify the economy and maximize non-oil revenues as an alternative to sole reliance on oil revenues and avoiding a fiscal deficit.”
Central Bank Governor Ali Al-Alaq stated that Iraq’s internal and external debts have reached approximately $150 billion, in response to a parliamentary question directed to him by MP Raed Al-Maliki.
In a statement issued on Saturday, Al-Maliki quoted Al-Alaq as saying that Iraq’s internal debt had risen to 91 trillion dinars, and its external debt had reached $54 billion.
He added that the budget deficit is too large to be covered by loans and bonds, noting that “there are no restrictions on the US Federal Reserve’s use of oil revenues.”
According to Al-Alaq, “The value of the bonds that Iraq purchased in the United States amounted to $11 billion.”
The Central Bank of Iraq announced last Saturday that Iraq’s domestic debt had increased for the month of July 2025.
The bank stated in a report seen by Shafaq News Agency that “Iraq’s domestic debt rose in July to 90.30 trillion dinars, an increase of 2.91 percent compared to last June, which reached 87.74 trillion dinars.”
He added, “The debt also increased by 16 percent compared to the same period last year, reaching 76 trillion dinars.”
The bank indicated that “the reason for the increase in domestic debt is due to a 1.72 percent decrease in government bank loans in July compared to June.”
It’s worth noting that the Eco Iraq Observatory previously considered that oil sales were no longer sufficient to cover the state’s monthly running expenses, which amount to approximately 11 trillion Iraqi dinars.
The observatory stated in a press statement received by Shafaq News Agency that “current expenditures represent the largest portion of the state’s expenditures, amounting to 11,503,656,980,146 dinars,” indicating that “this amount, out of a total of 27 trillion dinars, represents the total expenditures of the licensing rounds, the Chinese agreement, and investment.”
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