Iraq’s Public Spending Declines as Domestic Debt Stabilises: CBI Report

Reports 03:12 PM - 2025-08-04

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The Central Bank of Iraq (CBI) has reported a decline in public spending and stabilisation of domestic debt during April 2025—an indication of improved financial management, according to economic experts.

 

Decline in Public Spending

Public spending in April stood at 9.49 trillion dinars, marking a 6.69% decrease compared to March’s expenditure of 10.179 trillion dinars.

Dr Khalid Haider, an economic expert, told PUKMEDIA: “The decline in public spending is a positive indicator of the government's administrative efficiency and its ability to manage expenditure without excess—provided it does not coincide with a fall in public revenues.”

He added that curbing spending contributes to reducing the fiscal deficit, thereby enhancing balance between revenues and expenditures.

Stability in Domestic Debt

According to the report, domestic debt remained unchanged at 58.54 trillion dinars in April—the same as in March. The CBI highlighted that this stability reflects the government's adherence to budgetary limits and its commitment to maintaining financial performance without resorting to additional domestic borrowing to fund state institutions.

Iraq’s Oil Production to Rise under OPEC+ Agreement

In a separate development, the OPEC+ alliance, during a virtual meeting on Sunday, 3 August 2025, agreed to continue phasing out voluntary production cuts. As part of the plan, Iraq’s oil production is set to rise to 4.22 million barrels per day in September.

Commenting on this, Dr Haider stated: “Increasing Iraq’s oil output will positively impact public revenues, giving the government more fiscal space to implement service projects and ensure salary payments without disruption.”

However, he warned that relying solely on oil revenues is unsustainable in the long term, stressing the need to boost non-oil income sources such as customs, border revenues, and investment.

“What matters is growing overall public revenue—whether from government or private sectors—as this reflects local economic growth and reduces dependency on imports,” he said.

Supports Agreement Between Erbil and Baghdad

Dr Haider further noted that the increase in Iraqi oil exports under the OPEC+ decision could support the implementation of existing agreements between the federal government and the Kurdistan Regional Government, particularly if exports resume through the Turkish port of Ceyhan and include oil from the Kurdistan Region.

According to the Federal Ministry of Oil, Iraq’s crude oil exports in June reached 98,882,613 barrels, generating revenues exceeding $6.698 billion, according to final figures from the State Oil Marketing Organisation (SOMO).



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