Governor of the Iraqi Central Bank, Ali Al-Allaq, has stated that Iraq's total domestic and external debts have reached approximately $150 billion. This announcement comes alongside warnings that the government may struggle to cover its expenses through oil revenues.

In a statement issued on Saturday, Iraqi parliament member Raed Al-Maliki quoted Al-Allaq, who revealed that Iraq's domestic debt has risen to 91 trillion Iraqi dinars, while external debt stands at $54 billion.

Al-Allaq emphasized that the budget deficit is "very large" and cannot be covered through loans and bonds. He also clarified that "there are no restrictions by the US Federal Reserve on the use of oil revenues," countering potential speculation. According to the Central Bank Governor, the value of bonds purchased by Iraq in the United States has reached $11 billion.

Supporting these concerns, the Central Bank of Iraq reported last week that the country's domestic debt increased in July 2025. The bank's report stated that "Iraq's domestic debt rose in July to 90.30 trillion dinars, an increase of 2.91 percent compared to June, when it was 87.74 trillion dinars." This figure also represents a 16 percent increase compared to the same period last year, when the debt stood at 76 trillion dinars.

The bank attributed the rise in domestic debt to a 1.72 percent decrease in government bank loans in July compared to the previous month.

The alarming debt situation is further compounded by a report from the Iraq Eco Observatory, which previously warned that oil sales are no longer sufficient to cover the government's monthly operating expenses. These expenses amount to about 11 trillion dinars. The observatory detailed that "operating expenses represent the largest part of state spending, amounting to 11,503,656,980,146 dinars," a figure that is part of a total monthly spending of 27 trillion dinars, which also includes expenses for licensing rounds, the China agreement, and investment projects.