Page 26 - IRANRptDec20

6.0​ Public Sector 6.1​ Budget
Iran’s budget for next Persian year ‘could be based on oil price of $40’
Iran’s draft budget skips parliamentary scrutiny as coronavirus means legislature cannot be convened
Iran’s budget for the next Persian year (starts March 21, 2021) could be based on an oil price of $40 a barrel, according to government spokesman Ali Rabiei.
“The revenue sources for the next year’s budget are not finalised yet by the government ... Our primary forecast for now is oil at $40 [a barrel],” Rabiei said in remarks on an official website, relayed by Reuters.
He added that the budget assumptions were not final as yet.
The extent of Iran’s oil sales on the grey market—Iran has to operate under the radar as the Donald Trump administration pursues its policy of using sanctions in an effort to drive Iranian crude off world markets—is a matter of conjecture. However, there is the prospect of US President-elect Joe Biden striking a new political deal with Tehran that would remove heavy US sanctions. Such an agreement is by no means guaranteed as things stand, but if it was achieved it could open the way for Iran to build up oil export sales to as high as 2mn b/d within around two years.
Traditional parliamentary scrutiny in Iran of the country’s draft state budget has been skipped in favour of sending it straight to the Guardian Council for approval given that 23 MPs have fallen ill with the coronavirus, the ​Financial Tribune d​ aily has reported.
Asadollah Abbasi, spokesman for the presiding board of the parliament, reportedly explained that the virus outbreak meant that, as per Article 85 of the Iranian Constitution, the draft budget for the 2020/2021 Persian calendar year (which commences on March 20) should be moved on to the executive body once it became clear the legislature could not be convened.
The 12-member Guardian Council—made up of Islamic Law experts selected by the supreme leader of Iran and six jurists selected by the parliament from among jurists proposed by the head of the Judiciary—has 20 days to review the budget bill from March 3, according to Abbasali Kadkhodaei, its spokesman.
The draft budget as it stands does not take into account the loss of income to the state from the closure of businesses in the country caused by the coronavirus epidemic.
The International Monetary Fund (IMF) estimated in April that Iran could hit a budget deficit of nearly 10% this year from a 5.7% deficit in 2019. The IMF, meanwhile, has also calculated that Iran's total budget deficit for the current fiscal year will be around $58bn.
26​ IRAN Country Report December 2020 www.intellinews.com