Millions of Iraqis face financial instability due to delayed government salary payments amid liquidity crisis.

Millions of Iraqis now face an uncertain financial future as the government struggles to pay salaries on time. With the admission that July salaries were delayed for over a week, families across the country are grappling with the reality of financial instability. This crisis has created a ripple effect, impacting not only individual households but also the broader social and economic fabric of the nation.

The Iraqi government allocates approximately 8 trillion Iraqi dinars ($5 billion) monthly to public sector workers, pensioners, and welfare recipients. For many, these salaries are the primary source of income, making delays in payment a significant burden. The inability to plan for monthly expenses has led to growing anxiety and a sense of unpredictability that affects daily life and long-term stability.

The liquidity crisis has deepened due to a sharp decline in oil revenue, which has been further exacerbated by the closure of the Strait of Hormuz. This has compounded existing challenges, including service crises, particularly the ongoing electricity shortage. The combination of these factors has created a precarious situation for millions of Iraqis who rely on regular income to meet their basic needs.

Bassem Ali, an employee of the Ministry of Environmental Protection in Baghdad, described the situation as more than just a delay in salary payments. He noted that the uncertainty about when salaries will be paid has disrupted family planning and created a sense of instability. “The family is no longer able to prepare a monthly plan to cover the expenses and liabilities,” he said, highlighting the emotional and practical toll of the crisis.

Maha Kareem, a worker at the Ministry of Higher Education and a mother of two, echoed similar concerns. She explained that the fear of further delays has led her to limit her spending to basic necessities. “Concern is no longer tied to the height of the salary but to the date it will arrive,” she said, emphasizing how the lack of economic stability affects mental well-being and family dynamics.

The crisis has also had a noticeable impact on local businesses. Taha al-Marsumi, owner of a food and household goods store in Baghdad, reported a significant drop in demand. “During the period of wage payments, the market would come to life,” he said, noting that families typically purchased supplies for a whole month at once. The delay in salaries has disrupted this pattern, affecting both families and business owners alike.

As the situation continues to unfold, the uncertainty surrounding salary payments has created a climate of anxiety and instability. The crisis underscores the importance of economic stability and the need for reliable income to support families and communities. The situation serves as a reminder of the interconnectedness of economic health and social well-being, calling for attention and action to address the root causes of such crises.

Source: Read the original report (translated from Hebrew)