Government financial advisor: Inflation in Iraq is the lowest in the Arab world
Government financial advisor: Inflation in Iraq is the lowest in the Arab world
2026-01-16
The Prime Minister’s financial advisor, Mazhar Muhammad Salih, confirmed on Friday that Iraq recorded a low inflation rate of about 1.5% by the end of 2025, noting that inflation in Iraq is the lowest in the Arab world. Salih told the official news agency that “the Iraqi economy is witnessing a remarkable phase of monetary stability, as it recorded a low inflation rate of about 1.5% by the end of 2025, according to estimates by the International Monetary Fund, which is among the lowest rates in the Arab region.” He explained that “this achievement is attributed to the monetary policy that succeeded in maintaining price and exchange rate stability and protecting the purchasing power of the dinar, which strengthened confidence in the national currency and provided a more favorable environment for investment.”
He also added that “the recent Cabinet decisions aim to address what is known as ‘job inflation’ as a step to support social stability and improve income levels,” noting that “these measures achieve positive short-term returns by stimulating domestic demand and enhancing economic confidence, especially if they are financed within the limits of financial sustainability and do not exceed the absorptive capacity of the economy.”
He also explained that “the biggest challenge remains in transforming this monetary stability into sustainable productive economic growth, since government employment, if not linked to productivity, may create a gap between public spending and real output, and increase the fragility of the economy to fluctuations in oil prices.” He continued, “The solution lies in linking employment to training and qualification programs, and empowering the private sector through legislative and financial reforms, as well as diversifying the economic base by focusing on agricultural development, manufacturing, renewable energy, and increasing opportunities in the digital economy.”
He stressed that “Iraq today has a rare dual opportunity represented by low inflation and monetary stability,” adding that “this opportunity can turn into a long-term gain if it is invested in building a solid productive base, which will ensure the continuity of financial and monetary stability in the medium and long term, and move the economy from the cycle of rentier dependency to the path of sustainable growth.”
burathanews.com
