IMF: Iraq among the economies most affected by regional turmoil in 2026

A report issued by the International Monetary Fund showed that Iraq will be among the economies most affected by regional turmoil during 2026, with clear repercussions on inflation rates, external accounts and public finances.

According to the report, which was reviewed by Shafaq News Agency, Iraq is among a limited group of countries facing double pressures as a result of the disruption of trade and the rise in transportation costs, in addition to the effects of armed confrontations on trade routes, especially those related to the Strait of Hormuz, which has led to a noticeable decline in current account and financial balance indicators compared to previous expectations.

The IMF noted that Iraq and Iran experienced the greatest negative pressures on their external and fiscal accounts among the affected countries in the region, as trade losses and declining economic activity outweighed any potential gains from higher oil prices, leading to downward revisions in fiscal performance for 2026.

On the inflation side, the report explained that Iraq witnessed an increase in expectations within the Gulf Cooperation Council (GCC) countries, driven by increased import costs and higher commodity prices, with increases in the region ranging from moderate levels in Iraq and some GCC countries to higher levels in Iran.

According to the IMF, these developments reflect the sensitivity of the Iraqi economy to regional turmoil, particularly with regard to supply chains and foreign trade costs, in addition to the country’s reliance on vital transport routes that pass through geopolitical hotspots.

The report also predicted that pressure on Iraq’s economic indicators would continue in the coming period, unless there is a breakthrough in the regional trade environment and an improvement in the conditions of economic and financial stability.

Shafaq.com

Al-Fayez rules out holding an “emergency” parliamentary session to complete the cabinet.

On Wednesday, MP Amer Al-Fayez, a leading figure in the coordination framework, ruled out holding a session of the House of Representatives during the coming week, suggesting that the completion of the cabinet will be postponed until after the end of the legislative holiday.

Al-Fayez told Shafaq News Agency that “the Prime Minister and the Coordination Framework are determined to complete the cabinet in order to support stability and complete the projects included in the government’s ministerial program.”

He added that “what is hindering the completion of the cabinet is the House of Representatives entering its legislative recess,” explaining that “there is a need to call for an emergency session, but the quorum for emergency sessions may or may not be achieved, given the travel and vacations of most members of parliament.”

He pointed out that “the political blocs concerned with the ministries have not yet submitted the names of the candidates to the Prime Minister,” explaining that “the names can be submitted within a few days if an agreement is reached to hold a session of the House of Representatives.”

Al-Fayez added that “there is difficulty in holding a session of the House of Representatives during the next week, and the council is currently on legislative leave, and the representatives are not ready to attend,” suggesting that “if a quorum is not achieved, the completion of the cabinet will be after the end of the legislative leave.”

The head of the National State Forces Alliance, Ammar al-Hakim, had confirmed earlier today that Iraqi political forces and parties are conducting intensive consultations to decide on the remaining seats of the government cabinet by holding an “emergency” session of the House of Representatives, given that there is a mandatory legislative recess that lasts from the beginning of this June until the first of July.

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Exclusive: Al-Zaydi approves plan to integrate factions: 35,000 job opportunities in exchange for surrendering weapons

Informed sources revealed details of the recent meeting held by the leaders of the Coordination Framework, in the presence of the Commander-in-Chief of the Armed Forces and the head of the committee overseeing the disarmament of armed factions, while noting that 35,000 job opportunities have been allocated for members of factions who agree to hand over their weapons.

The sources told Shafaq News Agency that “Al-Zaydi presented to the Coordination Framework the proposals of the Committee for Disarming the Factions, which he heads, which included allocating 35,000 job opportunities in the security and military institutions and the Counter-Terrorism Service, with the door to integrating the elements of the factions to be closed after the number is completed.”

She added that “a time limit of no more than three months has been set for the factions to decide their position on whether or not to disarm,” noting that “the total number of Saraya members whose weapons were disarmed by their leader Muqtada al-Sadr reached approximately 15,000, and thus 20,000 job opportunities remain, which is sufficient to accommodate all the factions.”

According to the sources, anyone who fails to meet the deadline will face legal and military prosecution. They noted that Al-Zaydi explained the country’s financial situation to the leaders of the Coordination Framework, and that the process of funding the allocations for those joining the government institution requires double the time and effort to complete, and that the government has more than one option to address the issue, including internal borrowing.

She explained that “the leaders of the coordination framework supported the proposals of the Al-Zaydi Committee, and it was agreed to attach leaders from the Ministries of Defense and Interior and the supporting security agencies to supervise the process of dismantling weapons, auditing the criminal records of the faction members, and distributing them in accordance with their technical and field capabilities.”

A political source told Shafaq News Agency on Tuesday that Prime Minister Ali al-Zubaidi had proposed to the American side an approach based on establishing service and investment projects inside Iraq, to ​​be implemented by American companies, in exchange for proceeding with the issue of restricting weapons to the state and the factions handing over their weapons.

This comes after the Coordination Framework authorized Al-Zaydi to take decisions and measures to preserve the country’s higher interests, while supporting the project to restrict weapons to the state and to separate the Popular Mobilization Forces from political, partisan and social frameworks, in a position that was practically considered a political cover for Al-Zaydi to act on the issue of the factions.

This political movement was strengthened after the leader of the Shiite National Movement, Muqtada al-Sadr, announced the disassociation of the “Peace Brigades” from the movement and their affiliation with the state, and called on the rest of the factions to move away from partisan and sectarian frameworks and join under the authority of the government, a step that al-Zaydi welcomed and called on the other factions to follow.

Asaib Ahl al-Haq also followed this path, as it announced the formation of a central committee to begin procedures for disengaging from the Popular Mobilization Forces formations, inventorying personnel, weapons and vehicles, and organizing mechanisms for liaising with the Commander-in-Chief of the Armed Forces. Then, the Imam Ali Brigades announced a similar decision that includes inventory, handover, transfer and reintegration of affiliates within state institutions.

Shafaq.com

Kuwait: Foreigner killed and 63 injured in recent Iranian attack

The Kuwaiti Ministry of Health announced on Wednesday that 63 people were injured as a result of the Iranian attack that targeted Kuwait, confirming that the injured included civilians and employees at Kuwait International Airport, as well as a number of travelers.

The ministry said in a statement seen by Shafaq News Agency that it had activated emergency plans and raised the level of preparedness in all hospitals and medical institutions to deal with the repercussions of the attack.

For its part, the Kuwaiti army announced that it had detected and dealt with 13 hostile ballistic missiles and 17 drones, confirming the success of the air defense systems in countering the threats that targeted the country.

The army added that the attacks resulted in the death of an Indian resident and injuries to a number of people, in addition to causing serious material damage in some locations.

He noted that the sirens sounded five times during the day due to the missile and drone attacks.

For its part, the Kuwaiti Civil Defense reported that it dealt with nine reports of falling debris resulting from the interception of Iranian missiles and drones, stressing that follow-up and field assessment operations of the damage are continuing.

Kuwait condemned earlier on Wednesday the Iranian attacks that targeted civilian facilities with ballistic missiles and drones at dawn, confirming that the attack on Kuwait International Airport resulted in the death of one person and the injury of others, as well as material damage to vital facilities and diplomatic missions.

For its part, Qatar expressed its strong condemnation of the Iranian attacks that targeted civilian sites in Kuwait and Bahrain, including Kuwait Airport, considering them a violation of the sovereignty of the two countries and a breach of the principles of international law.

It is worth noting that the Kuwaiti Civil Aviation Authority announced this morning the activation of the emergency plan at Kuwait International Airport, following an attack on the passenger terminal by drones and missiles, which it said resulted from “Iranian aggression”.

Shafaq.com

Within two days, al-Zaydi reached an agreement with Asa’ib Ahl al-Haq and Kata’ib al-Imam Ali to implement measures to restrict weapons.

On Wednesday, Prime Minister Ali Faleh al-Zaidi agreed with delegations from the Asaib Ahl al-Haq movement and the Imam Ali Brigades to form a joint committee to implement measures to restrict weapons to the state within the next two days.

The Prime Minister’s Media Office stated in a statement received by Shafaq News Agency that “Al-Zaidi received two delegations from the Asa’ib Ahl al-Haq movement and the Imam Ali Brigades, and during the meeting he expressed his thanks and appreciation for the responsible position shown by both Qais al-Khazali and Shibl al-Zaidi, and their contribution to strengthening the path of building the state, through responding to the directives of the Supreme Religious Authority, and supporting the government’s directions and its ministerial program in restricting weapons to the hands of the state, and joining under the banner of the state and the command of the Commander-in-Chief of the Armed Forces.”

Al-Zaydi stressed, according to the statement, that Iraq is witnessing an important transformation today in light of the great security stability achieved, which makes the current stage a stage of construction, reconstruction and comprehensive development, and requires the combined efforts of all Iraqis to participate in the country’s renaissance and the consolidation of state institutions.

The Prime Minister praised the magnitude of the sacrifices made by the members of the armed forces and security services, in all their formations, during the confrontation of the challenges that threatened the existence of the Iraqi state.

He stressed that “the Popular Mobilization Forces were one of the main factors in achieving security stability, and that its members today represent a fundamental pillar in the process of building and development alongside the rest of the state institutions.”

The statement indicated that the meeting agreed to form a “joint committee to develop appropriate mechanisms for implementing the procedures for disengaging from the Popular Mobilization Forces and restricting weapons to the state within the next two days, in accordance with the constitution and the law, and to strengthen the authority of the state, and to contribute to supporting security and stability and consolidating the project of a strong Iraqi state, capable of achieving the aspirations of its citizens.”

This comes after the Coordination Framework authorized Al-Zaydi to take decisions and measures to preserve the country’s higher interests, while supporting the project to restrict weapons to the state and to separate the Popular Mobilization Forces from political, partisan and social frameworks, in a position that was practically considered a political cover for Al-Zaydi to act on the issue of the factions.

This political movement was strengthened after the leader of the Shiite National Movement, Muqtada al-Sadr, announced the disassociation of the “Peace Brigades” from the movement and their affiliation with the state, and called on the rest of the factions to move away from partisan and sectarian frameworks and join under the authority of the government, a step that al-Zaydi welcomed and called on the other factions to follow.

Asaib Ahl al-Haq also followed this path, as it announced the formation of a central committee to begin procedures for disengaging from the Popular Mobilization Forces formations, inventorying personnel, weapons and vehicles, and organizing mechanisms for liaising with the Commander-in-Chief of the Armed Forces. Then, the Imam Ali Brigades announced a similar decision that includes inventory, handover, transfer and reintegration of affiliates within state institutions.

Informed sources revealed earlier on Wednesday the details of the last meeting held by the leaders of the Coordination Framework in the presence of the Commander-in-Chief of the Armed Forces and the head of the committee overseeing the file of disarming armed factions, while indicating that 35,000 job opportunities have been allocated to members of the factions who agree to hand over their weapons.

The sources told Shafaq News Agency that “Al-Zaydi presented to the Coordination Framework the proposals of the Committee for Disarming the Factions, which he heads, which included allocating 35,000 job opportunities in the security and military institutions and the Counter-Terrorism Service, with the door to integrating the elements of the factions to be closed after the number is completed.”

Shafaq.com

SWOT analysis of the Iraqi economy amidst dollar exchange rate fluctuations: Strategies for protecting citizens and promoting economic stability

“This analysis is based on the SWOT model, which is a strategic framework used to assess the strengths, weaknesses, opportunities, and threats that affect the economy.”

The slight rise in the US dollar exchange rate in Baghdad and the limited decline in Erbil may seem like routine daily fluctuations in the currency market, but for Iraq, the implications are far more significant. Iraq remains heavily reliant on imports and oil revenues, meaning that any change in the dollar’s value, however small, has a direct impact on the economy and the lives of its citizens. The exchange rate is not merely a financial figure; it is a factor that affects household purchasing power, business costs, inflation levels, and public confidence in economic stability.

The limited movement of the dollar today does not constitute a crisis in itself, but it reflects the sensitivity of the Iraqi economy to external variables. Iraq still relies on oil to finance the majority of its budget, making the stability of the dinar contingent on the continued flow of oil revenues. Should oil prices decline or regional tensions escalate, impacting trade and energy, the economy could face greater pressure on the exchange rate and inflation levels. Therefore, true stability of the dinar cannot be achieved solely through central bank interventions, but rather through building a diversified economy capable of generating revenue and employment opportunities independent of oil.

Through SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats), the current economic reality can be understood more deeply, and the necessary policies to protect citizens from future exchange rate fluctuations can be identified.

Strengths

The greatest strength of the Iraqi economy lies in the country’s vast oil wealth. Oil exports are the primary source of government revenue and provide a steady flow of US dollars into the economy. This revenue enables the Central Bank of Iraq to maintain strong foreign reserves and intervene in the market when necessary to stabilize the exchange rate.

The government also possesses financial and monetary tools that enable it to manage liquidity and control some market movements. Compared to many developing countries suffering from severe monetary crises, Iraq still has financial resources that allow it to mitigate significant currency fluctuations.

In addition, the Iraqi banking sector has witnessed a gradual development in electronic payment systems and digital financial services, which forms an important basis for enhancing transparency and reducing reliance on paper money in the future.

Weaknesses

Despite its oil wealth, the Iraqi economy suffers from a structural weakness: a heavy reliance on imports. Most food, medicine, appliances, and industrial materials are imported and paid for in US dollars.

This means that any increase in the price of the dollar is quickly reflected in the prices of goods and services within Iraq, leading to an increase in the cost of living for citizens, especially those with limited income.

The lack of economic diversification is also a major problem. Productive sectors such as agriculture, industry, tourism, and technology remain limited in their impact compared to the oil sector, making the Iraqi economy highly vulnerable to fluctuations in global oil prices.

In addition, a large volume of economic activity continues outside the formal banking system, limiting the effectiveness of monetary policies and reducing levels of transparency and financial oversight.

Opportunities

Despite the current challenges, exchange rate fluctuations can present a real opportunity for economic reform.

Iraq has an opportunity to accelerate its economic diversification plans by investing in agriculture, industry, renewable energy, logistics, and modern technology. Increased domestic production will reduce the need for imports and alleviate the demand for dollars.

Financial digitization also represents an important opportunity to enhance transparency, combat corruption, improve the collection of taxes and government fees, in addition to reducing money laundering and financial evasion.

Another important opportunity is improving the investment environment and attracting local and foreign capital by simplifying administrative procedures, developing infrastructure and enhancing legal stability, which contributes to creating new job opportunities and achieving sustainable economic growth.

threats

Inflation is one of the most significant threats facing the Iraqi economy. If the dollar continues its significant rise, the prices of imported goods will increase, leading to a decline in citizens’ purchasing power and increased cost-of-living pressures.

Geopolitical tensions in the region also pose a significant threat to economic stability. Any disruption to oil exports, trade, or shipping lanes could directly impact government revenues and the exchange rate.

Another threat is a loss of confidence in the market. When citizens and traders expect the dollar to continue rising, demand for it for savings or speculation may increase, putting further pressure on the Iraqi dinar.

Excessive dependence on oil remains the biggest strategic threat to the Iraqi economy, as any sharp drop in global oil prices will lead to a decline in government revenues and reduce the state’s ability to support currency stability.

How can citizens be protected?

To protect citizens from the effects of exchange rate fluctuations, economic policies must focus on two parallel axes: maintaining monetary stability in the short term, and carrying out structural economic reforms in the long term.

In the short term, the central bank should continue to monitor the market, ensure the availability of dollars for legitimate trade, and prevent illegal speculation. In the long term, the real solution lies in building a diversified economy that is less dependent on oil and imports.

This includes supporting local production, developing the industrial and agricultural sectors, expanding electronic payment systems, combating corruption, improving the investment environment, and linking financial and administrative systems to modern technology.

The recent rise in the dollar’s value does not represent a genuine crisis at present, but it sends a clear message that sustainable economic stability cannot depend solely on oil. The more Iraq succeeds in leveraging its strengths, addressing its weaknesses, capitalizing on available opportunities, and preparing for potential threats, the better equipped it will be to protect its citizens and build a robust economy capable of withstanding future shocks.

Economic Studies Unit / North America Office,

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Al-Jubouri: Parliament is proceeding with holding a session to complete the cabinet during the legislative recess.

MP Iyad al-Jubouri, from the Azm Alliance, confirmed on Monday that the Parliament is moving towards holding a session during the legislative recess to complete the vote on Prime Minister Ali al-Zubaidi’s cabinet.

Al-Jubouri told the Information Agency, “Parliament is determined to hold a special session to complete the cabinet during the legislative recess in order to fill the vacant ministerial positions and finalize this matter.”

He added, “Completing the cabinet is an important entitlement for the current government, and it is not in anyone’s interest to postpone the session or obstruct the procedures for completing the government formation.”

He pointed out that “political blocs are required to cooperate in order to expedite the resolution of this matter in a way that ensures the completion of state institutions and their executive functions.”

Almaalomah.me

American message to Baghdad: We demand an end to threats emanating from Iraqi territory.

American message to Baghdad – We demand an end to threats emanating from Iraqi territoryShafaq News – Washington
The US Chargé d’Affaires in Iraq, Joshua Harris, stressed on Tuesday the importance of reducing threats from Iraqi territory to regional peace in the region.

Harris said in press statements seen by Shafaq News Agency: “I stressed to Iraqi President Nizar Amidi the need to put an end to threats from Iraqi territory,” noting that “the meeting with the Iraqi president discussed the need to take decisive measures to preserve sovereignty.”

He stressed “the need to reduce the threat to regional peace emanating from Iraqi territory,” noting that “the meeting also discussed building a strong, mutually beneficial partnership.”

Harris continued: “I also discussed with the Iraqi president the need to take decisive measures to preserve sovereignty,” praising what he described as “a fruitful dialogue with the Iraqi president.”

Earlier today, Harris praised the Coordination Framework’s position supporting the confinement of weapons held by Iraqi factions and the severing of any ties between the Popular Mobilization Forces and the official defense system in the country, during his meeting with National Security Advisor Qasim al-Araji.

With the outbreak of the Iran-US war, Iraqi armed groups carried out several attacks on what they described as American interests in the Gulf states and the region, using ballistic missiles and drones.

Shafaq.com

Warnings against increasing the exchange rate without measures to ensure that citizens are not harmed.

Former MP Abdel Hadi Mouhan warned against increasing the exchange rate in local markets by a government decision without finding solutions and taking measures to ensure that the citizen is not harmed or affected by the increase in the exchange rate.

Mohan told Al-Maalomah, “Iraq is suffering from a shortage of cash liquidity due to the current situation in the region and the tensions in the surrounding region, which will push the government to take some measures to ensure liquidity.”

He added that “there is a decline in oil sales and this has negatively affected the economic situation, and therefore things are heading towards increasing the exchange rate in local markets to ensure an increase in state revenues.”

He explained that “the government’s move towards increasing the exchange rate must be accompanied by measures to ensure that citizens and employees are not harmed, through taking certain measures related to the markets to guarantee that citizens are not burdened.”

Almaalomah.me

The coordination framework gives the green light to complete the cabinet formation.

A member of the Coordination Framework, Uday Abdul-Hadi, confirmed on Tuesday that the Framework’s meeting held the previous evening gave the green light to finalize the remaining ministerial appointments in Ali al-Zaidi’s government, anticipating significant developments next week.

Abdul-Hadi told Al-Maalouma that “the meeting of the Coordination Framework forces, held yesterday evening in Baghdad with all its leaders in attendance, gave the green light to complete the remaining ministerial appointments in Ali al-Zaidi’s government.”
He added that “next week may witness significant developments that could lead to an extraordinary session of the Iraqi Parliament to vote on the remaining ministerial portfolios, particularly the Ministries of Interior and Defense.”

He indicated that “the roadmap is now clear, and its outlines may be announced to the public in the coming days regarding the candidates for the positions,” noting that “there is a possibility of changes in some portfolios in terms of the candidates’ names.”
Abdul-Hadi concluded by saying that “political consensus will remain the decisive factor in decision-making within the Parliament.”

The Coordination Framework announced, at the conclusion of its meeting Monday evening, that it had authorized the Prime Minister and Commander-in-Chief of the Armed Forces to take the necessary measures and decisions to safeguard the country’s supreme interests.

Almaalomah.me