Iraq Central Bank Governor Warns of Structural Budget Deficit

Central Bank of Iraq (CBI) Governor Ali al-Alaq warned that the national budget deficit has evolved from a temporary estimate into a permanent structural deficit. He noted that this imbalance reflects a deep-seated economic vulnerability caused by Iraq's excessive reliance on oil revenues. To address the deficit and fund essential development expenditures, Al-Alaq indicated that Iraq may need to pursue external borrowing. He noted that the lending capacity of local commercial banks has reached its limit. Despite these fiscal pressures, the Governor confirmed that public sector salaries remain secure. He further stated there are currently no plans to adjust the official exchange rate, which will be maintained at 130,000 dinars per 100 US dollars. The CBI continues to manage liquidity and foreign exchange reserves to ensure monetary stability and keep inflation under control.