CBI Makes Urgent Announcement: October 2025

Iraq’s Debt Has Reached a Critical Point — Immediate Action Required

The country of Iraq is now facing a serious financial emergency. According to the governor of the Central Bank of Iraq (CBI), total domestic and foreign debt has surged to roughly $150 billion. (The New Arab)

This alarming figure comes just ahead of Iraq’s parliamentary elections on 11 November 2025, and experts are warning that the stakes could not be higher. 

Why This Matters — Right Now

• Oil revenues make up more than 90 percent of Iraq’s income. If oil prices drop to around $50 per barrel, the government could instantly struggle to pay its massive public-sector wage bill. (The New Arab)

• The domestic debt is about 91 trillion Iraqi dinars, while foreign debt amounts to roughly $54 billion (of which about $43 billion dates back to pre-2003 and approximately $10 billion is new borrowing). (The New Arab)

• Economists warn that rising loans could degrade Iraq’s credit rating (already at “minus B”), bring higher interest rates, weaken the Iraqi dinar, and increase vulnerability to external pressure. 

• Foreign borrowing could compromise Iraq’s political independence, giving external actors leverage. (The New Arab)

What the Central Bank Is Saying — But Why Many Remain Wary

The CBI is trying to calm fears by claiming the ratio of public debt to GDP remains “below 43 percent” — a figure it describes as “moderate and within safe international limits.” 
It also states that actual borrowing in recent budgets is only ~18.2 percent of what was planned, and that much of the domestic debt is held by state-owned banks. 

However — and this is key — analysts say the trajectory is what matters more than the current ratio. Because reliance on oil remains extremely high and spending (especially on public wages) continues to climb, the risk of a sudden shock is very real.

The Bottom Line: Why You Should Be Concerned

If things don’t change fast, Iraq risks more than an economic slump:

• Collapse of public finances: With such high dependency on oil and huge payroll commitments, a commodity price drop or global shock could force drastic cuts.

• Currency and inflation danger: A weak dinar and high borrowing could drive inflation and reduce living standards.

• Loss of sovereignty: Foreign debt can bring foreign influence—something observers say Iraq should avoid.

• Political instability: With elections looming, economic instability can feed political unrest, protests, and social strife.

Urgent call: The next Iraqi government must act now — before things spiral — by creating a clear plan to diversify revenue away from oil, reform public spending, and manage debt sustainably.