The Prime Minister’s advisor: The government will resort to borrowing to secure salaries if the war continues.
The Prime Minister’s advisor: The government will resort to borrowing to secure salaries if the war continues.
2026-03-14
The financial advisor to the Prime Minister, Mazhar Muhammad Salih, confirmed on Saturday that the effects of obstructing Iraqi oil exports through the Strait of Hormuz will not appear now, but after two months. He indicated that the government will resort to internal borrowing if the closure of the strait continues, and stated that Iraq is financially secure for 5 months. Salih told the official agency, “There is an impact from obstructing Iraqi oil exports through the Strait of Hormuz on the overall financial and economic situation in the country, but it is not apparent now, because the oil is exported and then the pricing is determined.”
He also pointed out that “the impact will begin to appear about two months from now, that is, by the fifth and sixth months, due to the cessation of exports, and most likely a settlement process will take place because estimates indicate that the war will last at most 4 months.” He continued, “There is no solution for the government other than resorting to borrowing in order to provide salaries and pay external obligations,” indicating that “Iraq will go through a period of austerity during the two months that we referred to, in wages, pensions, and social welfare.”
He added, “One of the solutions that the government will adopt is internal borrowing, and there is cooperation between the monetary and financial authorities, because Iraq’s reserves are good and allow it to borrow.” He further stated that “Iraq’s monetary reserves support its ability to obtain internal borrowing, which will increase if the crisis continues, but Iraq is immune and will not be greatly affected if this crisis continues for 4 or 5 months.”
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