A view of part of the Iraqi capital, Baghdad. Photo: Getty Images
Baghdad (IraqiNews.com) – Iraq is experiencing a serious financial and liquidity problem, causing delays in paying state employees.
The fall in income from oil, due to the difficulties of exporting via the Strait of Hormuz, has put the Finance Ministry of Iraq in a deficit by trillions of dinars.
The Iraqi government is considering home loans to finance its enormous monthly salaries.
Crude oil exports, which account for approximately 90 percent of Iraq’s federal income, fell dramatically because of the military operations in the region and maritime shipping difficulties.
Iraq requires between 8 and 11 trillion Iraqi dinars ($6.1 billion to $8.4 billion) every month to pay millions of governmental staff and pensioners.
The country’s income fell significantly below expenditure demands, resulting in a large monthly shortfall and an acute cash crisis.
Payrolls have experienced extraordinary delays, causing public concern and reducing local economic activity.
Financing shortfalls have put a burden on government-owned enterprises, particularly drug delivery in the health sector.
Authorities aim to engage in temporary local borrowing to avoid incurring further international debt, as well as long-term calls for diversified state resources.