IMF prepares new lending program for Iraq

The International Monetary Fund. Photo: AFP Baghdad (IraqiNews.com) – The International Monetary Fund (IMF) is preparing a new lending program for Iraq after starting formal discussions with authorities in Baghdad. IMF Managing Director Kristalina Georgieva confirmed that Iraq submitted an official request for a new support program during the IMF’s annual meetings in Bangkok. The IMF forecasts that Iraq’s economy will contract by 16 percent in 2026, heavily impacted by regional conflict and disruptions around the Strait of Hormuz, which constrains its vital energy exports. IMF spokesperson Julie Kozack stated that the fund is engaging directly with Iraqi authorities to understand their economic priorities, address structural vulnerabilities, and shape the structure of the financial support package. Iraq’s last formal program with the IMF concluded in 2019, and the country is scheduled to pay approximately $428 million in interest to the institution through 2030. Since the outbreak of conflict in the Middle East on February 28, Tehran has almost completely restricted navigation through the Strait of Hormuz. Iran now mandates that vessels follow specific routes, occasionally targeting those that attempt to pass without prior coordination. In response, Washington has imposed a blockade on Iranian ports. The Iraqi economy relies heavily on energy exports, most of which transit through this strait.