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Iran Parliamentary Think-Tank Warns Government About Unrealistic Budget

Officials carrying copies of Iran's next year budget in the parliament as President Hassan Rouahni makes his speech. December 8, 2019

The Majles Research Center in a report published today has said that a substantial portion of projected revenues in the government’s budget bill for next year is “unrealistic” and has advised parliament to communicate its general recommendations for amending the bill to the government.

The report by the influential parliamentary think-tank on Wednesday has also criticized the government for not properly taking its expenditures into account when preparing the budget bill presented to the Majles by President Rouhani on December 8.

Pointing out that budget shortfall has been a recurring issue in the past few years the report says the budget bill has been prepared in the same manner as the previous year’s budget bill “without implementing any structural reforms”.

According to the report one of the consequences of the administration’s failure to implement the reformative advice offered to it is “highly overestimated revenues in the budget bill”.

Tasnim News Agency close to the Revolutionary Guards had on December 14 reported that the government sector’s debts to the Central Bank in August this year had grown by 1,000 percent in comparison with the previous 12 months and stood at 630 trillion rials (approximately $4.8 billion at higher free market rate).

The government has predicted selling one million barrels of crude oil per day in the next Iranian calendar year (starting on March 21) which if not realized will force it to compensate the shortfall by drawing from the National Reserve Fund.

Current estimates of Iran’s oil exports are between 100,000-300,000 barrels per day, compared with a pre-sanction high of 2.5 million barrels per day.

On December 16, First Vice President Es’haq Jahangiri admitted that Iran’s oil exports have hugely declined due to tightening U.S. sanctions but did not disclose how much oil is being currently exported. Jahangiri has also said that even India is now refusing to buy Iran’s oil.

The International Monetary Fund (IMF) and the World Bank have issued worse estimates for Iran’s growth prospects, too. According to IMF Iran’s economy will shrink by a massive 9.5 percent this year.