Experts: Liquidity is under control and does not represent a financial gap.
Experts: Liquidity is under control and does not represent a financial gap.
2025/12/23
Prime Minister Mohammed Shia al-Sudani directed officials to assess the impact of public finance reforms, emphasizing the importance of rationalizing spending and maximizing revenues to ensure the stability of the national economy. Economic experts believe that the current liquidity fluctuations do not represent a genuine financial gap, and that structural reforms, strategic projects, and the digital transformation of taxation and electronic collection are effective tools for boosting revenues and supporting productive sectors.
The Prime Minister’s Media Office stated in a statement that “Al-Sudani chaired a meeting of the Ministerial Council for the Economy yesterday, Monday, and directed the concerned authorities to measure the size of the financial impact after the implementation of the reform measures to rationalize spending, as well as to measure the size of their effectiveness,” stressing “the implementation of financial and structural reforms to rearrange the priorities of public spending.”
He pointed to “the importance of proceeding with reform steps that would create more job opportunities in the private sector, and open doors to new investments in various sectors to increase revenues and reduce the burden on the general budget.”
Commenting on the financial situation, Dr. Mazhar Muhammad Salih, advisor to the Prime Minister, affirmed that the fluctuation in monthly liquidity does not represent a genuine financial gap, but rather reflects the volatility of oil prices and the limited non-oil revenues. He emphasized the importance of structural reforms to ensure the stability of public finances and avoid future crises. In an interview with Al-Sabah newspaper, Salih explained that controlling operational spending and redirecting it towards essential obligations, such as salaries for employees and retirees, social safety nets, and critical sectors, acts as a safeguard to prevent financial pressures from being passed on to citizens.
For his part, financial expert Alaa al-Fahd pointed out that the Iraqi economy suffers from a rentier structure, which necessitates the adoption of urgent short-term reforms to control spending and long-term strategic reforms to diversify revenues and encourage productive sectors. He added to Al-Sabah newspaper, “Major projects such as the Grand Faw Port and the Development Road project, along with revitalizing the agricultural and industrial sectors, provide sustainable resources and create job opportunities.” He stressed that managing the next phase requires courageous decisions and well-considered reforms to ensure financial and economic stability.
alsabaah.iq
