When the local economy is vulnerable to external shocks due to the rents of the Iraqi economy and its dependence on a single source of public revenues, in addition to internal shocks, which need to increase public spending and not be covered by the revenues collected, which made the financial management look for ways to finance the deficit and resort to internal and external shocks, public debt is one of the tools of fiscal policy that can be used to fund the obligation of the state budget. In particular, when the local economy is vulnerable to external shocks due to financial management and the economy, this is also due to how debt is used, which includes funding consumer spending rather than income-generating investments, which affects GDP.