Iraqi prime minister's adviser says Baghdad faces a cash flow strain, not bankruptcy, with a 3.3 trillion dinar salary gap

Mudher Mohammed Saleh, financial and economic adviser to Iraq's prime minister, said on Saturday 1 August 2026 (10 Mordad 1405) that the country's financial position reflects difficulty managing cash flows under exceptional uncertainty rather than a lack of resources or any risk of bankruptcy. He said the government could continue paying salaries and meeting essential obligations if it managed its fiscal and monetary tools efficiently, but that if the war continues into early next year and further affects oil exports, Baghdad may turn to domestic and external borrowing alongside reordered spending priorities.

According to the State Organization for Marketing of Oil (SOMO), Iraq earned more than $18 billion from the sale of 268.09 million barrels in the first half of 2026, less than the revenue reported for only four months of the same period last year. Shipping disruption through the Strait of Hormuz sharply reduced exports from Iraq's southern terminals, tightening government liquidity.

Finance Minister Faleh Al-Sari said monthly payments to public employees, pensioners and social welfare recipients total about 7.8 trillion dinars ($5.95 billion). The ministry had disbursed around 3 trillion dinars ($2.29 billion) and held about 1.5 trillion dinars ($1.15 billion) in available liquidity, leaving an estimated funding gap of 3.3 trillion dinars ($2.52 billion).