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News: Iran Economy

Iran Regime’s New Budget Lacks Transparency

Iran Regime’s New Budget Lacks Transparency

By Shahriar Kia

At the beginning of the month, the cabinet of Iran regime’s President Hassan Rouhani approved the regime’s budget bill for the year March 2019 to March 2020. Certain parts of the budget have been released and many have described it as “unambitious”.

Estimates of oil income is noted to be 30 trillion tomans (around $7.15 billion) and the government projects that it will export 1.5 million barrels per day at a cost of $54 per barrel.

However, this is about as cautious as the budget gets.

During the first half of the current Iranian year (starting March 2018), non-oil revenues have fallen short of what was predicted. For example, from March to September this year, government revenue from taxes was predicted to be 72.40 trillion tomans, but it actually brought in 50.34 trillion tomans – a shortfall of 22.06 trillion tomans. For the tax revenue in the 2019/2020 budget, projections are the same for annual tax revenues – 120 trillion tomans (around $29 billion).

A lot of questions remain to be answered. For example, how is the government going to pay the salaries and pensions of government employees? The current budget states 74 trillion tomans (around $17.6 billion) for government salaries. For the next budget, it should allocate approximately 88 trillion tomans (around $21 billion) for these same salaries. What is also unclear is how private companies will be paid.

Every year we see the same uncertainties with regards to the government’s budget and there is never any transparency.

It is worrying to see that a government can allow such a vague budget to pass. It seems to work off the theory that money will be found for what it needs to be spent on. This goes a long way to explain why the Iranian economy is in such a mess.

The people of Iran are becoming poorer and poorer and an increasing number are slipping under the extreme poverty line. The people have watched the Iranian regime plunder the nation’s wealth on terrorism, proxy groups and militias, its nuclear program and numerous other malign acts.

The Iranian economy is losing strength because of inflation and there are concerns that it will get worse. If the projections of the next budget are not met, in particular if the revenues have a shortfall again, then the economic crisis is certainly going to get worse. If it does, the Iranian regime will have no choice but to borrow – a step that will worsen inflation.

Unemployment in the country is something that has already effected many, and something that many others face. In the next budget, the government has tried to keep the development allocations stable but the U.S. sanctions on Iran’s international commerce may cancel out any action taken by the government.

The people of Iran know that the situation is going to get worse under the current regime’s leadership. They welcome the sanctions because they understand that it needs to be put under pressure. And they have vowed to maintain the domestic pressure they are putting on the regime.

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