Mazhar Muhammad Salih, Adviser to the Prime Minister for Financial Affairs, said today, Wednesday, that the World Bank’s estimate of Iraq’s indebtedness of more than $150 billion is inflated and false.
“The issue of Iraqi public debt requires professional differentiation of its history and details, as well as not taking its numbers without a clear logical analysis,” Saleh stated. When measured in international currency, the internal public debt is around 71 trillion dinars, and the government banking system still has custody of those obligations in the form of government bonds and treasury transfers.” At about 54 billion dollars, the foreign debt payable until the year 2028 is anticipated to be around 23 billion dollars, and there are loans due after the year 2028, so the external debt becomes approximately 30 billion dollars.
“There is a debt pending on the 2004 Paris Club agreement, i.e. sovereign debts before 1990 belonging to four Gulf countries and four other countries, which are about 40 billion dollars,” he added, “and if they are activated, if they are correct (because they are, as is termed economically, reprehensible debts because they financed the Iraqi-Iranian war.” If it is accurate again at that time, it must be deducted by 80% or more under the Paris Club agreement for 2004, to become less than $ 9 billion or less.
“We do not know the method of calculating the debt in the World Bank report,” Saleh stated. It may have included the (hypothetical) deficit in the federal general budget 2023, which is anticipated to be over 64 trillion dinars, and part of it was approved to achieve the foreign debt of 50 billion dollars, as an anticipation of the complete internal public debt being paid early, which is a concern.” It was not achieved, and thus the reading of Iraq’s internal and external debts came to be about 152 billion dollars, which is an exaggeration instead of being about 84 billion dollars (except for the balance suspended under the Paris Club agreement as an abhorrent debt).
“However, even in light of its unjustified inflation, the public debt-to-GDP ratio will remain between 54-57% of the estimated GDP for the year 2023, and it is within the current safe economic stability area, which is usually estimated at around 60%,” he said.