Economy, Domestic Economy

No Budget Deficit, Even if Oil Prices Halved

No Budget Deficit, Even if Oil Prices HalvedNo Budget Deficit, Even if Oil Prices Halved

Iran will encounter no budget deficit even if the oil price drops to half its current value, government spokesman Mohammad-Baqer Nobakht said on Monday on the sidelines of the first National Economic Conference.

According to IRNA, Nobakht who is also the vice-president said that the government is taking necessary measures to cope with a possible further decrease of oil prices and its probable impact on the next year’s budget. If the oil price slumps to half its current value, the administration will lose 300 to 350 trillion rials ($ 11.1 billion to 12.9 billion at official exchange rate) of its revenues and will be obliged to compensate the deficit via its current or capital expenditures as well as offering governmental assets, he explained. “We will spend our resources more economically.” There is a big difference between “lack of sufficient financial resources” and “budget deficit”, he underlined.  

Nobakht emphasized that despite its lack of financial resources, the administration pays a specific attention to capital projects as well as production sector. About 240 trillion rials ($8.8 billion) have been paid for capital projects and 5 trillion rials ($185 million) have been given to the production sector since the beginning of the current year (March 21, 2014).

The First Iranian Conference on the Economy was held in Tehran January 12-13 to study major economic problems and investigate avenues to reach sustainable growth and create jobs.