Government financial advisor: Internal and external debt is within safe global limits.
Government financial advisor: Internal and external debt is within safe global limits.
2025-12-20
The Prime Minister’s Financial Advisor, Mazhar Muhammad Salih, confirmed on Saturday that Iraq’s external debt stands at 4%, which is within safe limits. He also indicated that both internal and external debt are within internationally accepted safe ranges. Salih told the official news agency that “Iraq’s external public debt constitutes only about 4% of the GDP, a very low percentage compared to internationally recognized safe limits, which allow external debt to reach up to 60% of GDP.” He pointed out that “this means that Iraq is outside the circle of external debt overburden, which is clearly reflected in its stable credit rating at level B over the past years and up to the present.” He continued, “As for internal public debt, the accumulated amount during the current government’s term does not exceed 34 trillion dinars, a figure much lower than the hypothetical ceilings included in the three-year budget.” He added that “the financial planning for that budget assumed annual borrowing levels nearly double what was actually achieved over the three years, meaning that the ratio of actual implemented internal debt to planned debt did not exceed 15% during the implementation period of the three-year general budget, as stipulated by law.” Number (13) of 2023.
He also noted that “the planning for the 2026 budget takes into account that the outstanding debt balance, particularly the inherited domestic debt accumulated over more than a decade, along with the remnants of external debt, together constitute only 31% of the total annual GDP, a percentage that also falls within the safe global range for financial stability and does not represent a structural burden on public finances.”
He added that “the 2026 budget’s recourse to hedging with a hypothetical borrowing ceiling is not a cause for concern, but rather falls within the framework of sound risk management, especially the risks of fluctuations in global oil markets and their potential impact on planned revenue levels.”
He also pointed out that “this approach is reinforced by adopting high fiscal discipline, the foundations of which are being laid in the draft federal general budget law for next year, through controlling expenditures, enhancing non-oil revenues, and implementing high-level financial governance, while taking into account external shocks, particularly those related to energy markets.”
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