Page 34 - IRANRptOct22

6.0 Public Sector 6.1 Budget
Iran’s president approves budget aiming for 8% growth in new Persian year
Iran’s 2022-23 state budget ‘expected to bear deficit of around 3,000 trillion rial’
Iranian President Ebrahim Raisi on March 29 approved the public budget for the new Persian year (started March 20), ISNA news agency has reported.
Raisi previously unveiled a state budget that targeted GDP growth of 8%. The budget was also formulated on the basis of crude oil sales of 1.2mn barrels per day (bpd) with the perspective that US sanctions would be kept in place.
The sanctions are only likely to be lifted if Iran, the US and other major powers can, at the Vienna talks process, agree on a relaunch of the 2015 nuclear deal, or JCPOA. The process appears to be heading for a conclusion in the not-too-distant future, one way or another.
"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%.
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.
Iran’s 2022-23 state budget is expected to bear a deficit of around Iranian rial (IRR) 3,000 trillion ($11bn), according to Hadi Qavami, a deputy minister at the economy ministry, as cited by Tehran’s Financial Tribune. The figure represents a decline of 1,500 rials on the deficit written into the 2021-2022 budget, noted Qavami.
Last year saw the government compelled to make expenditures required to address impacts of the coronavirus crisis.
Iran, meanwhile, would hope for an economic boost should the 2015 nuclear deal be relaunched once ongoing talks between Tehran and major power in Vienna are concluded.
The question of how the US Biden administration could guarantee to Iran that Washington sanctions lifted for a nuclear deal ‘mark II’ would not be reimposed 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
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