Economy, Domestic Economy

No Budget Deficit Despite Oil Price Decline

No Budget Deficit  Despite Oil Price DeclineNo Budget Deficit  Despite Oil Price Decline

No budget deficit will be in sight for fiscal year 2014/2015, though oil prices have drastically fallen in recent weeks, a top economic official said on Wednesday.

Government Spokesman Mohammad Bagher Nobakht said the government will be able to meet its expenditure as predicted in the budget.

“Civil projects have received 100% of their set budget and the government is to use revenues generated through taxes, participation bonds and share offers just in case," Nobakht said, as reported by IRIB. "This year will hopefully end with no budget deficit."

His comments came after experts said the slide in global prices will lead to a budget deficit in Iran. Brent crude, a benchmark for oil, has plunged more than 20 percent since peaking in June at about $115 a barrel amid oversupply due to US shale production and lack of demand in the market. Persian Gulf benchmark oil's spot price fell to around $80 on Wednesday.

Iran's budget for this year, ending March 21, 2015, was set on the $100 per barrel oil price.

Iran holds the world’s fourth-largest proved crude oil reserves and the world’s second-largest natural gas reserves, according to the US Energy Information Administration.

On Sunday, Minister of Economy Ali Tayebnia also watered down the plunge in oil price, saying, "We will face no budget deficit stemming from the oil price slump."

"If oil prices keep falling, the government will definitely make plans to head off a budget deficit problem next year," he said.

The minister added that the National Development Fund of Iran (NDFI) is structured in such a way as to be protected from oil price fluctuations and can be a source of stability for the Iranian economy.

Nobakht said that the economy is on the right track, adding that the government is following policies set by the Leader Ayatollah Seyed Ali Khamenei as "resistance economy".

He predicted that next year's budget bill will be submitted to the parliament on time, as set by the law. Lawmakers from a specialized parliamentary committee then have 15 days to review the bill and send it to the floor for final vote. If ratified, the bill will go to the Guardians Council to be examined if it is in accordance with the Islamic principles.