Iraq's war-period losses reach $45 billion, prime minister's adviser says

BAGHDAD, Iraq — Iraq's financial losses from the war period spanning February 28 to mid-June reached $40 billion to $45 billion, the prime minister's financial adviser, Mazhar Mohammed Salih, said. The damage stemmed from reduced oil exports and deferred development projects, according to Saleh. Before the war, Iraq exported about 3.3 million barrels of oil per day and generated roughly $88 billion in annual revenue. After February 28, exports fell below 10% of that level and were limited to limited volumes through Turkey and Jordan, Salih said. The financial adviser warned that costs would rise further if the war drags on and exports fail to return to previous levels. Salih said salaries, pensions and social assistance payments — totaling about 8 trillion dinars, or $5.9 billion at the official rate — would be protected as a red line. To offset the drop in oil revenues, the government turned to domestic borrowing by selling treasury bonds at 3-5% interest. That pushed the domestic debt stock to 106 trillion dinars, with the Central Bank holding more than 60% of it. Salih said central bank reserves, which stood at $105-106 billion before the war, have not fallen below 50%, with the local currency backed by foreign reserves at roughly 90%.