IMF Says Iraq Faces Rising Fiscal Pressures Through 2026

BAGHDAD, Iraq — The International Monetary Fund said Iraq will face increasing fiscal pressures in 2026, driven by high energy subsidy costs, rising public debt and elevated borrowing costs in international markets. Iraq ranks among countries with the most expensive energy support programs, with the cost falling just below 6 percent of gross domestic product, according to the IMF report. Oil and gas price volatility has further weakened the country's budget position. Public debt has risen sharply compared to pre-pandemic levels, the report noted. Regional interest rate increases and tightening financing conditions have amplified fiscal strain on countries with substantial financing needs like Iraq. The IMF said these factors present challenges for controlling public expenditures, redirecting energy support and strengthening fiscal sustainability.