Economy, Domestic Economy

Development Spending Will Increase

Development Spending Will IncreaseDevelopment Spending Will Increase

Investment budget for development projects in the next Iranian year (starting March 21) has increased by 16% compared with the current year budget, the head of the Iranian parliament’s development committee, Seyyed Mehdi Hashmei, said on Saturday.  

“However, such an increase is not able to keep pace with the current inflation rate,” Hashmei  added as reported by IRNA.

The government of President Hassan Rouhani unveiled its draft budget for the next year fiscal year early December. The next year budget, which is based on oil prices remaining around $70 per barrel, is yet to be ratified by lawmakers.  President Rouhani has vowed spending cuts and tax hikes in next year’s budget as Tehran seeks to cushion the country against falling oil prices.

Oil prices have plunged more than 60 percent since June to less than $50 a barrel, placing severe strain on Iran’s economy, which has already been hit by western sanctions imposed over its nuclear energy program.

The proposed general budget, which includes both the budget of state-run enterprises and the budget of the government, amounts to 8,370 trillion rials (about $310 billion based on official exchange rate), up from 8,030 trillion rials ($297 billion) for the current budget. The government budget amounts to 2,670 trillion rials ($99 billion).