Iraq owes less than $10 billion in foreign debt
The financial advisor to the Iraqi Prime Minister, Mazhar Salih, revealed on Thursday that Iraq’s foreign debts are less than $10 billion.
In a statement to Shafaq News, Salih explained that Iraq’s federal general budget includes financial allocations to pay these debts.
The Iraqi official elaborated that Iraq’s foreign debts, which include both sovereign and foreign private sector obligations, originate from the Paris Club agreement settlements and date back to before 1990, adding that these debts must be paid by 2028.
In 2004, the Paris Club declared that it had achieved a deal to cut the $120 billion debt owed by Iraq by 80% over three years.
In order to finance the war with Iran in the 1980s, the Iraqi regime at that time borrowed money, weapons, and other supplies from different countries and sources. This led to the country’s current debt.
Last May, Salih confirmed that Iraq has paid all the loans it has taken from the International Monetary Fund (IMF) since 2003, a total of just under $8 billion.
Between 2003 and 2021, Iraq obtained several financing programs from the IMF, including emergency loans and long-term financial assistance, aiming to support the country’s macroeconomic stability and financial reforms.
In 2016, the IMF approved a financial program worth $5.34 billion to support economic reforms in Iraq. Within five years, Iraq paid out the loan in full after obtaining two-thirds of the total.
Iraq sought a $6 billion emergency loan from the IMF in 2021; however, the loan was not granted because, at the time, it hadn’t been linked to any of the IMF’s initiatives.
Iraq’s engagement with the IMF was intended to assist in addressing the economic issues brought on by the drop in oil prices, which were connected to fluctuations in the balance of payments, as well as to promote government reforms.
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