Page 4 - Iran OUTLOOK 2024

The government overestimated oil sales in the current fiscal year’s budget (March 2023-24), which means it was not able to export crude as much as it expected due to sanctions. Additionally, Iran had to sell its crude at discounted rates to incentivise buyers amid the sanctions. These issues have prompted a shift in budgetary focus, prompting sustainable income sources like taxation. Private businesses, already burdened by numerous economic challenges, are concerned about additional tax pressure.
According to Economy Minister Ehsan Khandouzi, the proposed general budget for the next fiscal year is IRR24,290 trillion ($49.7bn), marking a 16.7% year-on-year increase.
“Given that the government's main goal is to control inflation, efforts were made to formulate the budget bill in a realistic and achievable manner... Our second objective was to increase the share of sustainable revenues and reduce the share of oil sales in the budget,” the minister said during a press conference.
Crude oil revenue is expected to be IRR6,140 trillion ($11.8bn), a 16% decrease compared to the current fiscal year. The government plans to sell 1.35mn barrels of crude oil at €65.
Apart from tax and oil, additional revenue sources include bond sales, divestment of governmental companies and asset sales.
A projected $13bn at subsidised rate is earmarked for essential goods imports throughout the upcoming year, which starts on March 20, 2024.
The parliamentary review process is underway, with President Ebrahim Raisi submitting the Annual Budget Bill on November 21, albeit nearly a month overdue.
Final approval rests with the Guardian Council, ensuring alignment with the Constitution and Sharia law.
3.0 Political landscape
The Iranian political system is complex and there are a number of different factions vying for power. These factions include the hardliners, who support the Supreme Leader and the Islamic Revolutionary Guard Corps (IRGC), and the reformists, who are more moderate and seek to improve relations with the West.
The Iranian political landscape is likely to remain stable in 2024. However, there is a risk of increased political instability if there is a major economic crisis or if there is a change in leadership.
The October 7 Hamas attack on Israel and the Israeli retaliatory attacks overshadowed the foreign policy of the Islamic Republic in the final months of 2023. The implications of the conflict will continue to spill over to 2024 until some kind of a breakthrough may be found by the warring sides or through the mediators in the region, Qatar in particular.
4 IRAN OUTLOOK 2024 www.intellinews.com