Iraq's Economy Suffers $60 Billion Blow from Iran War

The ongoing US-Israeli war on Iran has put Iraq's economy under immense pressure. The country, heavily dependent on oil exports, has seen its revenues plummet by $60 billion due to the conflict. This significant drop in income is attributed to the disruption of trade through the Strait of Hormuz, a key shipping route for Iraqi oil.

The loss of revenue has been staggering, accounting for more than 90 percent of Iraq's federal budget. Prime Minister Ali al-Zaidi described the situation as 'extraordinary economic challenges' facing the country. Oil exports have been severely impacted, with around 90 percent unable to be exported through their usual Gulf routes.

The disruption has also had a ripple effect on supply chains, leading to increased transportation costs and delays for businesses and consumers. Local products are now being prioritized over imported goods, despite concerns about quality. The price of imported goods has risen by 25-30 percent due to the shortage and higher fuel and transportation costs.

The Iraqi dinar has also taken a hit, with the dollar rising to 1,600 dinars on the parallel market last week, before easing to around 1,575 this week. The divergence between the official exchange rate and the parallel market rate has created uncertainty for businesses and added to the financial burden on consumers.