Iraq downplays impact of falling oil prices on public sector salaries

Shafaq News/ On Sunday, Iraq's economic advisor to the prime minister, Mudher Mohammed Saleh, dismissed concerns that declining global oil prices would affect the payment of monthly salaries for the country’s public sector workers.

In a statement to Shafaq News, Saleh said, "Talk of a financial liquidity crisis and delayed salaries for public sector employees is nothing more than rumors and political distortion, and it is not true."

"Iraq has faced declining oil prices before, and this does not affect the salaries of state employees."

Saleh reassured the approximately 4.5 million public employees in Iraq that their salaries are fully secured and will be paid on time.

Earlier, economic experts had warned of a potential salary crisis for Iraqi workers due to falling oil prices. Iraq's continued reliance on oil as the sole source of revenue for the national budget is seen as a risk, especially amid global crises affecting oil markets. This often forces the country to cover budget shortfalls through external or internal borrowing.

Economic expert Nabil al-Marsoumi recently warned that the current oil price and reduced export volumes could lead to a shortfall in government revenue. Al-Marsoumi estimated that the government may struggle to cover the full cost of public sector salaries in the coming months, potentially leading to delayed or reduced payments.

Iraq, OPEC's second-largest producer, is heavily dependent on oil revenues. The hydrocarbons sector accounts for the vast majority of export earnings and some 90% of state revenue.