Iraq's Structural Economic Crises Deepen as New Government Takes Office

Iraq has entered a new political phase after months of deadlock with the election of a new president and a vote of confidence for the government led by al-Zidi, but the administration still faces a public trust deficit, internal coordination problems and mounting international pressure. The transition has not eased the structural economic strains that continue to weigh on the state. Disruptions in the trade and import sector are making it difficult for many businesspeople to obtain dollars through the central bank's electronic platform, helping preserve the exchange-rate gap on the parallel market. The problem has become a central pressure point for commercial activity and currency management. The federal government remains heavily dependent on oil revenues, while about 75% of the budget is allocated to current spending such as public-sector salaries. The investment budget is described as almost negligible, limiting the state's ability to finance long-term development. Strategic reserves are being presented only as temporary fixes, leaving the country confronted with its long-term economic development challenges. The broader warning is that Iraq has yet to resolve the structural crises that continue to deepen beneath the new political arrangement.