Iraq Believes in Little to No Debt

Iraq’s foreign debt has now fallen to below $10 billion, according to Mudhhir Muhammad Salih, financial advisor to the Iraqi Prime Minister, in a statement made on Thursday. 

In an interview with Shafaq News Agency, Salih confirmed that Iraq’s outstanding foreign debt is under $10 billion and that provisions have been set aside in the federal budget to ensure these obligations are met. 

“These external debts are largely tied to the Paris Club agreement, which focuses on settling debts incurred before 1990,” Salih explained. “The debt includes loans from both the foreign private sector and sovereign states, and Iraq is on track to fully repay these obligations by 2028.”

Salih highlighted the importance of Iraq’s relatively low level of foreign debt, noting that it has significantly improved the country's financial standing in the eyes of global credit rating agencies, including the US-based S&P.

The Paris Club, an informal group of creditor nations, had reached a major agreement in 2004 to reduce Iraq’s debt by 80%. At the time, Iraq’s debt stood at a staggering $120 billion, much of which had been accumulated during the 1980s as the former regime borrowed heavily from Arab, European, and Western countries to finance the prolonged war with Iran. The debt reduction was phased over three stages, which has helped stabilize Iraq’s economy and improve its financial outlook. 

With the goal of finalizing repayment by 2028, Iraq’s ability to manage its remaining debt load signals positive progress toward long-term economic stability.

 "Iraq has completed payment of $52.4 billion to compensate individuals, companies and governments who proved damages due to its 1990 invasion and occupation of Kuwait, the United Nations reparations body said."