Iraq’s debt profile continues to change in 2026 as domestic borrowing increases while external obligations decline, according to the latest Ministry of Finance data. The Iraq debt 2026 figures highlight a growing reliance on internal funding sources alongside ongoing efforts to reduce foreign debt exposure.
Total internal debt now stands at IQD 96.629 trillion, equal to approximately $73.8 billion. This rise reflects sustained government borrowing within the domestic market to support public spending and cover budget needs. In contrast, external debt has fallen to $10.076 billion, showing continued repayment efforts and reduced reliance on international creditors.
Between 2023 and April 2026, domestic borrowing reached IQD 46.035 trillion, or around $35.1 billion. Borrowing levels varied across the period. In 2023, the government borrowed IQD 7.590 trillion, followed by a sharp increase to IQD 17.105 trillion in 2024, which marked the peak year. Borrowing then eased to IQD 10.840 trillion in 2025, before reaching IQD 10.5 trillion in the early months of 2026.
Despite this upward trend in borrowing, the government also repaid IQD 19.910 trillion in domestic debt during the same period. These repayments helped limit the pace of net debt accumulation but did not fully offset new borrowing.
The Iraq debt 2026 data also reflects inherited domestic obligations from previous governments between 2004 and 2022, which amount to IQD 70.505 trillion. This legacy debt continues to form a major part of Iraq’s financial burden and shapes ongoing fiscal policy decisions.
On the external side, Iraq has made steady progress in reducing its foreign liabilities. The government repaid $2.166 billion in inherited external loans between 2023 and April 2026. As a result, total external debt has declined significantly.
Remaining pre-2003 legacy debt now stands at $2.963 billion, mostly owed to international creditors under older agreements. Additionally, external project-related borrowing from 2016 to 2022 previously reached $12.926 billion, reflecting past infrastructure financing commitments.
Overall, the Iraq debt 2026 figures show a clear shift in financial structure. Iraq is increasingly relying on domestic borrowing while steadily reducing external debt obligations. This trend highlights a broader strategy of managing fiscal pressure through internal markets while gradually lowering foreign exposure.
