Baghdad (IraqiNews.com) – Iraq’s Prime Minister’s Adviser for Financial Affairs, Mudhar Mohammed Saleh, confirmed on Saturday that the country’s external debt stands at just 4 percent of gross domestic product (GDP), placing it well within internationally recognized safe limits.
Speaking to the Iraqi News Agency (INA), Saleh explained that Iraq’s external public debt remains significantly below global thresholds, which typically allow external debt levels of up to 60 percent of GDP. This, he noted, means Iraq is far from facing external debt stress and continues to maintain financial stability.
Saleh added that Iraq’s low external debt burden has contributed to the country’s stable sovereign credit rating, which has remained at the “B” level in recent years, reflecting resilience despite regional and global economic pressures.
Regarding domestic debt, the financial adviser stated that accumulated internal borrowing during the current government’s term does not exceed 34 trillion Iraqi dinars. This figure is considerably lower than the borrowing ceilings anticipated under the federal three-year budget framework.
He explained that the financial planning for the triennial budget assumed annual borrowing levels nearly double the amount actually utilized. As a result, the proportion of domestic debt executed compared to what was originally planned did not exceed 15 percent throughout the three-year budget period enacted under Law No. 13 of 2023.
Saleh also pointed out that projections for the 2026 federal budget take into account the total stock of existing debt, including long-standing domestic obligations accumulated over more than a decade, in addition to remaining external liabilities. Combined, these debts amount to roughly 31 percent of Iraq’s annual GDP, a ratio that still falls within globally accepted safety margins and does not pose a structural burden on public finances.
He stressed that including a precautionary borrowing ceiling in the 2026 budget should not be viewed as a cause for concern, but rather as part of prudent risk management. This approach is designed to mitigate potential shocks arising from volatility in global oil markets and their impact on projected revenues.
According to Saleh, the government is reinforcing this strategy through stricter fiscal discipline in the draft 2026 federal budget law. Measures include controlling public spending, strengthening non-oil revenues, and applying high standards of financial governance to safeguard stability amid external economic uncertainties, particularly those linked to energy markets.
