Page 27 - bne IntelliNews Country Report: Iran Dec17

6.2 Debt
Iran - Gross external debt 2010 2011 2012 2013 2014 2015 2016* 2017*
External debt (USD bn)
20.030 17.344 7.406 7.006 5.441 6.322 7.475 8.481
External debt (% GDP)
4.281 2.929 1.258 1.366 1.277 1.577 / /
Source: World Bank, CEIC
Tehran’s city government is struggling with a debt load of IRR300tn ($7.6bn), the capital’s new mayor has revealed, P ersian daily Donyaye Eqtesad reported on September 26. The figure given by Mayor Ali Najafi will have caused little surprise among the sprawling city of 14mn. It is well known that former Mayor Mohammad Baqer Qalibaf spent a fortune on building several new underground metro lines and highways.
Najafi reportedly said: “The outstanding debt is 1.7 times more than the municipality’s total budget for the current year [of 2017-18].” The city’s budget for the current year is IRR179tn ($4.58bn), although, taking into account purchasing power parity, that figure is 20% smaller than it was six years ago.
The mayor noted that of the IRR90tn ($2.3bn) set aside for the city in the first half of the current Persian calendar year (March-September), only IRR67tn ($1.7bn) had been spent on projects.
He added that Tehran infrastructure projects, including the construction of further metro lines and overhauling existing overland transport lines, were demanding another IRR225tn ($5.7bn) from state coffers.
The city and national governments are instead looking to the private sector to finance projects, as current state expenditure is too high, Najafi said.
In August, Iran was in discussion with Italian officials over securing water replenishment expertise as part of an expensive project to construct a huge sewage system for the capital. One feature of the ambitious investment, being rolled out at breakneck speed, will mean water stocks will be replenished with sewage water purified at a large water treatment plant south of the city.
In July the Islamic Development Bank agreed to loan the Tehran city government an additional €125mn to enable an overhaul of the city’s sewage system, which is essentially non-existent across most of the urban spread.
Iran's foreign debt stood at $6.3bn in 2015, down almost 64% compared to the figure in 2011, when sanctions were placed on the country, the World Bank (WB) said in its latest International Debt Statistics 2017 report. Iran’s debt fell substantially thanks to the post-sanctions country being able to access frozen assets in several nations, including the US.
The report said that in 2015 Iran's long-term foreign debt was $2.3bn, its foreign short-term debt was $2.0bn and its debt owed to international financial organisations was also $2.0bn. The ratio of external debt to GDP stood at 1.6% for 2015, down from 2.9% in 2011.
27 IRAN Country Report November 2017 www.intellinews.com