Japan retains top billing as Iraq juggles rising external debt

Shafaq News/ Iraq's external debt burden continues to climb as it grapples with the aftermath of war and conflict, reaching $22.6 billion by the end of 2022, data from the World Bank revealed.

This figure marks a steady increase from $20.5 billion in 2021.

Among Iraq's creditors, Japan remains the top player, holding a 27% share of the total debt.

"Other countries", a broad category encompassing numerous lenders, account for 19% of the debt, followed closely by the World Bank at 18%. Notably, Iraq owes 21% to "other lenders," a category likely including private banks and financial institutions.

The United States, a key partner in Iraq's reconstruction efforts, occupies a relatively modest position, holding just 7% of the total debt. International bondholders and France follow with 6% and 5% shares, respectively, while the International Development Association, a World Bank affiliate focused on poverty reduction, holds the smallest portion at 1%.

The rising debt burden raises concerns about Iraq's long-term economic outlook since servicing these obligations can divert resources from critical areas like infrastructure development, healthcare, and education. Successive governments have failed to find the right balance between managing debt and investing in development projects.