IMF prepares new lending program for Iraq

Shafaq News- Washington/ Baghdad

The International Monetary Fund (IMF) is preparing a new lending program for Iraq, whose economy has been severely affected by the fallout from the war on Iran, after beginning talks with authorities in Baghdad, IMF spokesperson Julie Kozack said on Thursday.

Iraq was already facing severe financing constraints before the war began, she noted in a press conference, adding that the country's limited non-oil revenue base was putting pressure on public finances.

Earlier this month, IMF Managing Director Kristalina Georgieva revealed during the fund's annual meetings in Bangkok that Iraq had requested a new support program.

At those meetings, Georgieva praised the resilience of global economic growth despite the wars in Iran and Ukraine, but warned that the impact of conflicts varied significantly, with more vulnerable economies suffering the greatest damage.

Iraq's economy relies heavily on energy exports, most of which pass through the Strait of Hormuz, a vital shipping route for global oil supplies. The country was facing significant fiscal pressures even before the war began. The IMF forecast this month that Iraq's economy would contract by 16% in 2026.

Iraq's last program with the IMF ended in 2019. It is due to pay the international institution approximately $428 million in interest through 2030.