Shafaq News– Baghdad

Baghdad’s hypermarkets and so-called cooperative stores, once crowded throughout the week, now stand unusually quiet. Shelves remain stocked, but shoppers are scarce, a stark reflection of the financial crisis that has tightened its grip over recent months and reached a breaking point this year.

The empty aisles tell a story of a deepening recession. Where families once filled carts with weekly groceries, only a handful of customers now browse essentials, often leaving disappointed by prices many say have surged beyond reach. For many Iraqis, these markets no longer feel “cooperative” at all.

“The prices in the so-called cooperative markets are no different from anywhere else,” said Baghdad resident Ahmed Riyadh. “Companies have raised prices across the board, and the middle and lower classes are paying the price.”

He said government efforts have so far failed to cushion the blow. “The middle and poor classes are the most affected, yet no real solutions have emerged to address the financial crisis or support those hit hardest,” he told Shafaq News.

For Ruba Salam, the pressure has become unbearable. “The cost of living is suffocating,” she said. “We can no longer meet our family’s basic needs. These markets no longer help us; they drain us. Everything has become expensive.”

Many Baghdad residents link the market slowdown to delayed public-sector salaries, persistent warnings of a worsening financial crisis, the suspension of allowances for holders of advanced degrees, and broader regional security tensions. Together, these pressures have weakened purchasing power and frozen consumer spending.

The downturn has rippled through wholesale and retail trade alike. In Jamila wholesale market and Shorja, once the beating heart of Baghdad’s commerce, activity has slowed to a crawl as liquidity dries up.

“Our sales of basic food items have dropped to a quarter, or even less,” said Abbas Al-Salami, a wholesaler in Shorja. “Shop owners simply don’t have the ability to buy.”

He said delayed salaries have hit the middle class hardest, long considered the engine of Iraq’s domestic economy. “When salaries are delayed, everything stalls,” he said.

Retailers feel the strain just as sharply. Adnan Abdul-Hassan al-Rubai, who runs a shop in the Jihad district, said business briefly revives when salaries are paid, but the relief is short-lived. “Sales improve for about ten days,” he said, “then buying slows again.”

“The limited profits we make now are not enough to restock as we used to,” he added. “The lack of cash has shrunk the markets and affected shop owners, traders, and citizens alike.”

Economists say delayed salaries are central to the downturn. Mustafa Al-Faraj, an economic expert, said Iraq’s rent-based economy leaves it particularly vulnerable to shocks. “Iraq relies heavily on imports and lacks diversified income sources,” he said.

More than 60% of consumption, al-Faraj noted, depends on fixed monthly salaries. “When salaries are delayed, purchasing power collapses. The slowdown begins with non-essential goods and quickly reaches food and basic commodities,” he said. “This doesn’t just harm citizens, it squeezes small traders, slows cash circulation, and ultimately hits tax revenues and overall commercial activity.”

“Regular salary payments are not just a social obligation,” Al-Faraj added. “They are an economic necessity to prevent market paralysis.”

Economist Sadiq Al-Rikabi echoed the warning, saying delayed salaries trigger cascading economic, social, psychological, and even security consequences. “The most serious impact is the confusion and stagnation that grips the market,” he said. “Commercial movement stops, eroding the market’s foundations.”

As incomes shrink, Al-Rikabi said, households cut spending to the bare minimum, pushing the economy toward contraction and potential recession. “When cash disappears from the market, fear spreads,” he warned. “The result is near-total paralysis.”

He cautioned that prolonged cash shortages, already a factor behind delayed salaries, could deepen poverty, unemployment, and crime. “The government must exert every effort to ensure salaries are paid on time,” he said. “Delays only compound the damage.”

Officials familiar with the issue say salary delays stem from insufficient balances at the Ministry of Finance, which has yet to issue payment notifications to banks, a bottleneck now visible in the empty aisles of Baghdad’s markets.

Read more: The $55 floor: Iraq’s salary safety net under strain