Iranian Regime outlines budget and promises less reliance on oil amid U.S. sanctions

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Iran’s government presented a draft state budget of about $33.7 billion to parliament on Wednesday, promising less reliance on oil revenues and higher growth despite U.S. sanctions that have crippled the Islamic Republic’s economy, Iranian media reported. The value of the draft budget is set about 8,413 trillion rials, up 74% from last year’s figures in rial terms but lower than last year’s budget of $38.8 billion in hard currency terms because of the sharp fall of Iran’s currency.

“The next year’s budget bill focuses on infrastructure reforms, health, creating jobs, non-oil exports and the nation’s welfare,” according to Iran’s state news agency IRNA. Iran’s next fiscal year starts on March 21.

A budget official, quoted by Iranian news agencies, said an oil price of $40 per barrel was used in budget calculations. President Hassan Rouhani said in a televised cabinet meeting that Iran expected to sell more oil next year, adding that the government planned to use state bonds and selling of state properties as sources of revenue.

“We believe Iran will sell more oil next year, around 2.3 million barrels per day, including the exports and domestically,” Rouhani said. “But the revenue will be used to develop or empower the underprivileged. This does not mean that our budget has become more dependent on oil.” It is estimated that Iran exports less than 300,000 barrels of oil per day (bpd), compared to a peak of 2.8 million bpd in 2018, when Washington exited Iran’s 2015 nuclear deal with six powers and reimposed sanctions that have hit Iran’s economy hard by sharply cutting its vital oil exports.

U.S. President-elect Joe Biden, who will take office on Jan. 20, has said that he would return to the pact and would lift sanctions if Tehran returned to “strict compliance with the nuclear deal.” Parliament speaker Mohammad Baqer Qalibaf, a critic of Rouhani, said “what we really need to achieve in terms of revenue is zero reliance on oil income”, state media reported. “Our oil income should be used for infrastructure reforms and not for the budget,” he said.

Source » devdiscourse

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