Iraq's credit rating lifts with final reparations payment to Kuwait
Iraq paid Kuwait a final installment of war reparations more than 31 years after the invasion of Kuwait, which may free up funds for new domestic projects.
Iraq's economic situation in 2022 should benefit from Baghdad's paying the final installment of compensation to Kuwait for the invasion of 1990.
On Dec. 22, the Central Bank of Iraq announced the final payment to Kuwait, amounting to $52.4 billion, more than 31 years after the invasion of Kuwait.
Mazhar Muhammad Salih, a financial adviser to Iraqi Prime Minister Mustafa al-Kadhimi, told Al-Monitor that the payment has boosted Iraq's credit rating, and added, "Accredited international rating agencies placed Iraq within the B zone and developed to the international financial community a positive outlook on Iraq’s financial capabilities.”
Despite the payment, Salih pointed out that Iraq is still carrying a debt on the books with international creditors, although that could be resolved soon. "This debt is nominally owed to about 12 countries, including four Gulf countries, and belongs to the pre-1990 period," he said. Under the Paris Club agreement signed between Iraq and its international creditors, the amount should be written off by 80 percent, or $41 billion, so "then it would be equivalent to only $8-9 billion as a result of the Iran-Iraq war, and I expect it to be completely written off.”
