The Financial Times reported on the economic crisis that the Iran War is causing for Iraq. It said that Baghdad has lost around $5.4 billion since the start of the conflict and it only has 1-2 months worth of cash to cover government salaries. The Central Bank on the other hand said its reserves could cover 12 months worth of oil exports. The problem is by law the bank can’t cover the government’s budget so it has to issue bonds or some other means to provide money. Government salaries and benefits are the largest part of the budget because adding public workers is the main means that the ruling parties have to maintain their support. Before the war Baghdad was running into problems meeting its obligations because of low oil prices. Now it is barely making any money with the Strait of Hormuz closed.
