Shafaq News/ The Iraq Future Foundation (IFF) for Economic Studies reported that Iraq's internal debt surpassed 70 trillion dinar mark, reaching its highest point since 2003.
The IFF report indicates that Iraq's overall internal debt "increased by 1.5% in 2023 compared to the 2022 figure. The most notable surge occurred in 2020 when the debt surged from 38 trillion dinars in 2019 to 64 trillion dinars, representing a 67% increase. Despite a slight decrease in 2022, the debt resumed its upward trajectory in 2023, surpassing the 70 trillion dinar mark."
Approximately 37% of Iraq's internal debt arises from loans granted by commercial and government banks, with the remaining 62% owed by government institutions to the Central Bank of Iraq. The Foundation reported.
"Iraq's public debt represents 19% of its gross domestic product (GDP). When factoring in external debt totaling 40 trillion dinars, the overall debt amounts to approximately 110 trillion dinars or 29% of the GDP."
Despite these figures, the report indicates that Iraq's debt level is relatively manageable compared to global standards.
However, a critical concern highlighted in the report is that most of these debts are operational expenses rather than investments. Consequently, there are no means to recover these debts through revenue-generating projects. This situation results in additional costs for the state budget in the form of interest payments imposed by internal and external creditors.
The report recommends two options for the Iraqi government: either extinguish the non-recoverable internal debts or devise a clear plan to transform them into productive debts by paying off previous debts and leveraging new debt for investment and development projects.
"Such projects could increase domestic production across various sectors and generate revenue to cover debts and interest payments."