Iraq’s governing State Administration Coalition held its 38th regular session at the Government Palace on Sunday, September 6, 2026, warning that the country must shield itself from the economic consequences of U.S. sanctions imposed on regional states.
The coalition stressed that Iraq’s strained fiscal position leaves little room to absorb additional geopolitical or economic shocks. Therefore, officials emphasized the need for coordinated measures to protect the country’s financial stability and prevent regional tensions from worsening domestic economic pressures.
During the meeting, Prime Minister Ali Al-Zaidi announced an immediate suspension of demolitions targeting informal settlements. The measure will remain in place until authorities complete the distribution of plots under the government’s initiative to provide one million residential plots to citizens.
The decision aims to prevent further displacement while the government advances its broader housing program. At the same time, officials are expected to work on completing the necessary procedures for distributing the residential plots and addressing the needs of families living in informal areas.
Al-Zaidi also confirmed that the government will soon release a new liquidity tranche to settle long-standing state arrears. The payments will target debts owed to local farmers and private contracting companies, providing relief to sectors that have faced prolonged delays in receiving government payments.
The move could help improve liquidity across several parts of the domestic economy. In particular, settling outstanding agricultural payments could support farmers ahead of upcoming production cycles, while payments to contractors could help restart delayed projects and strengthen activity in the construction sector.
Meanwhile, the coalition’s warning over U.S. sanctions reflects broader concerns about Iraq’s exposure to regional economic disruptions. With public finances already under pressure, officials stressed the importance of preventing external conflicts and sanctions from creating additional strain on government revenues, trade and essential economic activity.
The coalition’s latest meeting therefore combined immediate social and economic measures with a wider call for Iraq to maintain stability amid growing regional uncertainty. The government’s planned payments and housing measures are expected to address domestic pressures, while its sanctions-related warning highlights the continuing challenge of protecting Iraq’s economy from developments beyond its borders.
