Iraq’s external debt reduced to $10B, expected to be cleared by 2028

Shafaq News/ Iraq’s foreign debt has decreased to below $10 billion, according to an announcement by Mudhhir Muhammad Salih, financial advisor to the Iraqi Prime Minister, on Thursday.

Speaking to Shafaq News Agency, Salih stated that Iraq’s foreign debt obligations remain under $10 billion and that the federal budget has allocated funds to settle these debts.

“These external debts stem primarily from the Paris Club debt settlement, which includes obligations dating back to before 1990. This includes both foreign private sector debts and sovereign loans, with a plan for full repayment by 2028,” Salih explained.

He emphasized that Iraq’s low level of external debt has enhanced its financial creditworthiness, which is recognized by international rating agencies like the US-based S&P.

The Paris Club announced in 2004 a comprehensive settlement to reduce Iraq’s debt—originally $120 billion—by 80% in three phases. These debts were accrued by the former regime during the 1980s, as Iraq borrowed funds from Arab, European, and Western countries to finance its war with Iran.