Iraq adviser says all fiscal tools to be used to safeguard salaries, pensions

BAGHDAD, Iraq — The prime minister's financial and economic adviser, Mazhar Mohammed Salih, said Iraq's public financial management is operating within a legal framework designed to guarantee spending stability regardless of external shocks. In remarks published in the official gazette, Salih said authorities are deploying technical fiscal instruments to prevent shipping and trade disruptions in the Strait of Hormuz from affecting oil-export revenues that fund the federal budget. Salih said the measures are aimed at shielding salary and pension payments from the impact of those disruptions. He noted that under the 2019 Federal Financial Management Law, the government has maintained the continuity of disbursements, with monthly outlays on August salaries, pensions and social protection benefits reaching roughly 8 trillion Iraqi dinars. With basic public services included, the total monthly spending figure rises to about 10 trillion dinars, Salih said. He added that oil revenues have shown a relative improvement over the past two months and that domestic borrowing is being retained as a legal instrument to cover temporary liquidity gaps. Salih said fiscal stability is not directly dependent on oil revenues but on a dynamic liquidity management system designed to preempt geopolitical shocks. He did not provide further details on the specific technical instruments being deployed.