TNT:
Tishwash: Al-Zidi and Al-Sudani affirm their support for development plans and the completion of the government formation.
Prime Minister Ali Faleh al-Zaidi and the head of the Reconstruction and Development Coalition, Mohammed Shia al-Sudani, stressed on Thursday the importance of continuing to support the government in implementing its development programs and completing the government formation, in line with the aspirations of the Iraqi public.
The Prime Minister’s Media Office stated in a statement that “Prime Minister Ali Faleh Al-Zaidi met today with the head of the Reconstruction and Development Coalition, Mohammed Shia Al-Sudani.”
The statement added that “the meeting witnessed an exchange of greetings on the occasion of Eid al-Adha, and a review of the most prominent developments on the national scene, in addition to stressing the importance of maintaining understandings between the political parties to complete the formation of the government, and stressing support for the government in implementing its development plans, in a way that meets the aspirations of the Iraqi people.” link
Tishwash: An economist says: Borrowing narrows Iraq’s economic options, and the solution lies in rationalizing spending.
Economic expert Manar Al-Obaidi confirmed that the continued decline in oil revenues and the government’s inability to compensate for them with alternative sources has limited the available economic options to a narrow corner, making borrowing the only way to cover monthly expenses amounting to about ten trillion dinars.
Al-Ubaidi explained in a statement, a copy of which was received by Al-Furat News, that “borrowing is not a radical solution, but rather may become a factor exacerbating the crisis.” He pointed out that public debt interest reached approximately seven trillion dinars in 2025 and is expected to exceed ten trillion dinars this year, equivalent to about 10% of total mandatory operating expenses.
He indicated that “the danger of the current path lies in the possibility that the government will reach a stage where it borrows to pay debt interest instead of funding public services.” He stressed that the real solution lies in rationalizing operating expenses, primarily salaries and social welfare, emphasizing that there is ample room for reform without affecting the citizen’s standard of living.
Al-Ubaidi cited the success of audits in the social welfare program during the first quarter of this year, which saved approximately 700 billion dinars. This means that more than 2.8 trillion dinars could be saved annually simply by partially reviewing beneficiary data. He questioned the size of the savings that could be achieved if the review included salaries and other areas of expenditure.
Al-Ubaidi concluded that the economic equation imposes two options, with no third alternative. Either we continue borrowing and turn debt into a structural constraint for decades to come, or we control and rationalize spending in pursuit of a gradual balance that protects the economy and the citizen’s standard of living, far from excessive optimism based on inaccurate impressionistic readings. link
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Tishwash: European Center: The US Federal Reserve is the only current “way out” of Baghdad’s economic crisis
The European Center for Economic Guarantees, Credendo, revealed in a report published today, Tuesday, May 26, 2026, the “depth of the crisis” that Iraq is going through during the current and upcoming stage, stressing that the government in Baghdad “needs” the US Federal Reserve.
The center said, according to what was translated by “Baghdad Today”, that the economic shock resulting from Iraq’s loss of its ability to export its oil as a result of the closure of the Strait of Hormuz is still “not fully apparent”, stressing that the consequences will include “enormous financial pressure on liquidity and difficulty in meeting the government’s financial obligations in the public sectors, in addition to a significant decline in the value of the Iraqi dinar and a rise in inflation rates.”
He continued, “The outlook for the economic situation in Iraq appears to be highly difficult and challenging, especially if the current crisis in the Strait continues or the region witnesses a new escalation of violence, which could lead to permanent damage to the Iraqi oil sector that cannot be repaired or avoided.”
He added, “Even if the United States and Iran reach a preliminary agreement to halt the war for a short period of time, restarting the oil fields will be extremely difficult, in addition to the risk of the conflict resuming at any time, which makes the process of resuming production and exporting again a major challenge for the Iraqi government.”
The center confirmed that the Iraqi government has an economic “way out” of the current crisis, represented by the large foreign financial reserve it possesses in hard currency, which it can use as a barrier to protect the Iraqi economy from the most serious consequences of the cessation of exports for a period of time that could reach months, stressing, “This reserve is not in Iraq’s possession.”
The center also clarified that Iraq’s large financial reserves are held with the US Federal Reserve in New York and not with the Central Bank of Iraq, which makes the use of those funds, with its long-term risks and short-term benefits, subject to a US decision.
The center indicated that the United States is aware of Iraq’s need for the large financial reserves held by the Federal Reserve, which led to “Washington using it as a political pressure tactic against the Iraqi government to push it to dissolve the factions, something that became very clear during Washington’s imposition of restrictions on cash dollar transfers to Iraq, which placed further financial restrictions on the Iraqi government.”
The center noted at the end of its report that Iraq’s temporary and currently available way out of the financial crisis, represented by the dollar reserves at the US Federal Reserve, carries another risk, explaining, “If Washington imposes economic sanctions on Iraq, the country will not be able to access the reserves of funds that it may use to finance its work for the coming months,” as it described it.
It is noted that political analysts have spoken about conducting governmental and party negotiations and discussions to reach an agreement to integrate the armed factions into a new security ministry in order to avoid American restrictions and possible sanctions on the economy. link
Tishwash: The debt trap threatens Iraq… Will the government borrow to pay off loan interest?
Economic expert Manar Al-Obaidi warned against the government resorting to internal or external borrowing after the deficit caused by the decline in oil revenues. He said that borrowing, if continued for long periods, is a factor that exacerbates the crisis, as it increases the burden of mandatory operational expenses represented by interest on accumulated debts. What is more dangerous, according to him, is the possibility of reaching a stage where the government is forced to borrow not to finance public services, but only to pay the interest on its debts.
Al-Obaidi stressed that the real solution is to rationalize operational expenses, especially the files of salaries and social welfare, which many avoid for fear of popular reactions, indicating that Iraq needs to conduct an oversight review of these files without affecting the citizen’s livelihood and dignity.
On May 21, 2026, the Governor of the Central Bank, Ali Al-Alaq, revealed that the general budget deficit had turned into an “actual and chronic deficit” reflecting a flaw in the structure of the economy due to the complete dependence on oil revenues, stressing that the country may resort to external borrowing to cover this deficit and finance development requirements after the ability of government banks to lend reached its maximum limits.
Al-Ubaidi stated in a report, which was followed by 964 Network:
Between borrowing and spending pressure: Where does the Iraqi economy stand?
With the continued decline in oil revenues and the Iraqi government’s inability to compensate for this shortfall from alternative sources, the available solutions are becoming increasingly limited, to the point where borrowing is almost the only unavoidable option.
The fact that everyone is aware of is that monthly expenses amount to about ten trillion dinars that can only be covered through one channel in the absence of oil, which is borrowing, whether internal or external. However, borrowing is not the magic solution that saves the economy, but rather, if it continues for long periods, it may be a factor that multiplies the crisis, as it increases the burden of mandatory operating expenses represented by the interest on accumulated debts.
Public debt interest payments reached approximately seven trillion dinars in 2025, and these interest payments are expected to rise this year to more than ten trillion dinars, equivalent to about 10% of total mandatory operating expenses. This is in light of the continuous increase in the size of public debt and the possibility of resorting to more borrowing in the coming months. These expenses will remain binding on any present or future government as long as debt levels remain high. Indeed, the danger of the current path lies in the possibility of reaching a stage where the government is forced to borrow not to finance public services, but only to pay the interest on its debts. This is a path that several countries have taken and paid a heavy price for.
From this it becomes clear that borrowing in itself is not a structural solution, and that the real, unavoidable solution is to rationalize operational expenditures, foremost among them the issue of salaries and social welfare, an issue that many avoid approaching for fear of popular reactions. However, the available data indicates that the scope for reform is wide, and does not necessarily require affecting the citizen’s standard of living. Comparing social welfare expenditures in the first quarter of this year with the same period last year revealed a decrease of about 700 billion dinars, achieved simply by conducting preliminary audits. This means that what was saved at the annual level may exceed 2.8 trillion dinars from just a partial review of beneficiary data. So what will the situation be when the review includes the salary file and all other aspects of government spending?
In short, the equation allows for only two options, and no third:
– Continuing to borrow until the public debt file becomes a structural constraint that burdens any government for decades to come.
Controlling and rationalizing spending and striving for a gradual balance between expenditures and revenues in ways that preserve the dignity of the citizen and protect his standard of living.
As for the excessive optimism that is sometimes promoted as easy and quick solutions, its source is mostly an impressionistic reading of the scene, not a numerical reading, that measures the amount of interaction, not the amount of accuracy. link
