Baghdad: Economic expert Manar al-Ubaidi has confirmed that Iraq is on the brink of a significant financial deficit, which is projected to exceed 15 trillion dinars by the end of this year. This alarming situation poses a threat to the country's ability to pay employee salaries and meet other financial commitments.
According to National Iraqi News Agency, al-Ubaidi highlighted that Iraq's financial predicament is intensifying as the nation grapples with a widening deficit. As of August 2025, Iraq's total revenues reached 82 trillion dinars, with a substantial 73 trillion dinars generated from oil, while non-oil revenues accounted for only 9 trillion dinars. In contrast, public expenditures climbed to 87.5 trillion dinars, with operational expenses alone consuming 73 trillion dinars, alongside 5 trillion dinars in government advances.
Al-Ubaidi pointed out that the real deficit had already reached approximately 10 trillion dinars by the end of August 2025. If this trend continues, the budget shortfall is expected to surpass 15 trillion dinars by year's end. Additionally, the Central Bank of Iraq's data indicates that it purchased $49 billion in currency from the Ministry of Finance, while it has sold over $60 billion through foreign currency auctions, depleting its reserves by around $11 billion to meet dollar demands.
The economic expert warned that Iraq's financial resources are being drained, exacerbated by falling oil prices, which have dipped to $60-65 per barrel. This situation suggests that unless swift measures are taken to boost revenues and curb spending, neither the current nor future governments will be able to cover essential expenses.
Al-Ubaidi also cautioned that borrowing might not be a viable solution, given the internal debt surpassing 90 trillion dinars and the local market's limited capacity for further debt absorption. He emphasized the need for a meticulous review of public spending to identify financial waste, particularly in areas like fictitious salaries and social welfare programs.
He called for a reassessment of food ration cards, drug subsidies, and other support programs to evaluate their effectiveness. With the impending delay in approving next year's budget due to government formation, Iraq faces an uncertain fiscal future without a definite spending framework.
According to Al-Ubaidi, the looming deficit, which represents more than 10% of total public revenues, is a genuine threat to the state's capacity to continue fulfilling its financial obligations, including salary payments. Failure to address the crisis promptly could lead to coercive measures that disproportionately impact the poor and unemployed.