The IMF cautions about Iraq escalating fiscal imbalance due to heightened spending and fluctuating forex market. Iraq’s financial stability is at risk as oil production decreases and the fiscal breakeven oil price potentially escalates to USD 96 per barrel in 2023. The government’s fiscal expansion may induce short-term inflation and long-term economic instability unless oil prices increase significantly. The IMF recommends a stricter fiscal policy to enhance resilience and decrease oil dependency.