Iraq faces its most serious financial test in decades; the collapse of oil exports threatens employee salaries.
The Iraqi economy is facing an unprecedented crisis after a sharp decline in oil exports as a result of regional tensions and the closure of vital shipping lanes, causing revenues to drop by up to 90%, in a direct blow to the main artery of the economy on which the country depends almost entirely.
According to economic data, Iraq’s exports have plummeted from about 4 million barrels per day to levels not exceeding 1.3 million barrels, which has put the general budget under severe pressure and raised widespread concerns about the government’s ability to secure employee salaries and meet its financial obligations in the coming months.
In this context, MP Mohammed Al-Bayati confirmed in a statement to Al-Maalouma that Iraq has effectively lost between 85 and 90% of its financial revenues due to the repercussions of the war in the region, noting that current exports through the Ceyhan port cover only 7 to 10% of the state’s financial needs.
He added that the current crisis represents a serious warning that requires urgent action towards diversifying sources of income and not relying solely on oil, as well as the need to find alternative export outlets that ensure the stability of revenues and mitigate the severity of external shocks.
For their part, economic experts warned that the continued decline in exports in this manner could lead to serious repercussions that go beyond the economic aspect to affect political and social stability, stressing that the solution lies in moving from a rentier economy to a diversified economy capable of withstanding crises.
They pointed out that the government’s options remain limited, most notably resorting to the central bank’s reserves or taking drastic financial measures, at a time when the situation demands swift action to secure liquidity and prevent the collapse of the state’s financial obligations.
Almaalomah.me