Shafaq News / Carnegie Endowment for International Peace said that Iraq has been suffering from a financial crisis since last June, due to the collapse of global oil prices and the raging oil price war between Saudi Arabia and Russia.
In a report published early this month, the institute said, "This financial crisis has repercussions in the short term as well as in the long term. In the short term, Baghdad finds it constantly difficult to pay the salaries of public sector employees, which required the state to borrow money from the central bank during the summer."
The report added that the monthly income of the state now covers only 50% of government expenditures. In the long term, Iraq is facing a total financial collapse of the state, which is likely to happen during the next year, indicating that the country is finding it difficult to cover its monthly expenses.
It is noteworthy that the size of the public sector has expanded during the era of successive governments to the point that the total revenues achieved by the Iraqi state are no longer sufficient to pay the basic expenses.
In 2019, oil revenues averaged $ 6.5 million per month, to which were modest non-oil revenues added (which are mainly from customs duties, totaling much less than $ 1 billion per month).
Since oil prices recovered after the deterioration they witnessed in March, average Iraqi oil revenues amounted to just over $ 3 billion per month and reached $ 3.52 billion last August.