An aerial view of a part of the Iraqi capital, Baghdad. Photo: AFP
Baghdad (IraqiNews.com) – The Iraqi prime minister’s financial advisor Mazhar Saleh told Rudaw News on Wednesday that Iraq’s total public debt is approximately 47 percent of the country’s gross domestic product (GDP).
Although Baghdad can easily handle its debt burden, the country’s dependency on revenues generated from oil exports leaves its economy exposed to various external factors.
The major issues in the Iraqi economy, according to Saleh, are its reliance on oil income, the poor performance of other productive sectors, and the growing administrative costs.
To guarantee that the Iraqi economy can survive foreign shocks, the Iraqi government is working to diversify income sources, notably in the industrial, agricultural, and service sectors, as well as reforming the tax, customs, and banking systems, according to Saleh.
In late June, the Central Bank of Iraq (CBI) revealed that the country’s domestic debt rose to 95.7 trillion Iraqi dinars ($73 billion) by the end of April 2026 compared to 90.51 trillion dinars ($69.1 billion) recorded at the end of 2025, representing an increase of 5.16 trillion dinars ($3.9 billion).
In 2024, the domestic debt in Iraq stood at 83.05 trillion Iraqi dinars (approximately $63.4 billion).
According to the statistics, domestic debt increased during the first four months of 2026, while external debt dropped in comparison to prior years.
Iraq’s external debt stood at $54.101 billion in 2025, compared to $54.601 billion in 2024 and $56.207 billion in 2023, marking a total drop of $2.106 billion over two years, according to the CBI.
Senior officials in the Iraqi financial sector and representatives from Oliver Wyman, a renowned firm specializing in financial audits, emphasized the significance of developing medium-term plans customized to the nature of the debt, Iraq’s credit rating, and key global indicators.
The officials also called for drawing up budgets based on realistic evaluations of the country’s available finances and execution capabilities.