Page 30 - IRANRptFeb22

Iran’s draft state budget based on 8% growth and oil at $60/barrel
Iran’s budget deficit at 9.5% in 2020
by a future American president remains a sticking point. The prospect of such a reimposition would keep many foreign investors away from Iran, despite the attractions of a country with a population of 84mn people.
In a recent interview with Al Jazeera, Iranian foreign minister Amir Abdollahian said: “We demand guarantees that include not imposing any new sanctions, and not reimposing sanctions after lifting them under any pretext.”
Iran has penciled in 8% economic growth and oil exports running at 1.2mn b/d at a price of $60/barrel in its draft state budget.
Iranian President Ebrahim Raisi presented the proposed budget on December 12 to parliament. Some of the economic strains it must address manifested on December 13 outside the parliament building when—backing teachers and educators in Iran who were on strike for a third day straight demanding better pay—hundreds of protesters gathered, RFE/RL reported. Video posted on social media showed scuffles during the rally as security forces apparently tried to detain one of the protesters.
The fiscal plan for the next Persian calendar year (starts March 21) has been drawn up on the assumption that the US sanctions would continue. That could change if the ongoing Vienna talks manage to restore full Iranian and US compliance with the nuclear deal, or JCPOA.
"The growth projects include 4.5% in investment growth and 3.5% in productivity growth," Raisi told parliament, state media reported.
With US sanctions still in place in an effort at keeping Iranian oil of world markets, Iran has been relying on China turning a blind eye to American demands to import substantial amounts of Iran’s crude on the grey market. State media reported that the nominally balanced draft budget amounted to 15,052 trillion rials ($50.2bn at the free market exchange rate). The new budget is about 10% bigger than the current budget in local currency terms. However, its value in real terms is lower due to annual inflation running at more than 40%.
The draft budget has to be passed by parliament and approved by a clerical body that vets legislation before it becomes legislation on the books.
Some MPs criticised the budget for in a scarcity on detail, including on the allotting of money for women’s rights
Raisi told MPs: "A requirement for economic stability is ensuring a budget that does not have a deficit. If there is a budget deficit, this will become the root of many problems in the country."
"In the... budget, borrowing from the central bank and increasing the monetary base are a red line. The plan is to prevent this, because it will create serious problems for the country's economy," he added.
The Central Bank of Iran (CBI) estimated that Iran hit a government budget deficit of nearly 9.5% in 2020 from a 5.5% deficit in 2019. The International Monetary Fund (IMF), meanwhile, has also calculated that Iran's total budget deficit would be around $58bn.
30 IRAN Country Report February 2022 www.intellinews.com