EghtesadOnline: Head of Planning and Budget Organization Mohammad Baqer Nobakht expects the government to run up a 370-trillion-rial ($9.6 billion) budget deficit in the current fiscal year (March 2017-18).
He said on Wednesday that the government predicts 89% of the 3.46 quadrillion rials the parliament approved in the budget law for this year as “general revenues” will materialize by the end of the Iranian year, IRNA reported.
This year’s budget assumes a $50 per-barrel price for crude, whose exports account for a majority of the government’s earnings.
However, Nobakht said, the government has practically sold each barrel of oil for $47, according to Financial Tribune.
President Hassan Rouhani reappointed Nobakht as the head of Planning and Budget Organization of Iran on Sunday.
The Central Bank of Iran’s latest report on the government’s balance sheet indicated that earnings stood at 236.4 trillion rials ($6.2 billion) for the first quarter of the current fiscal year (March 21-June 21), up 9.6% year-on-year. About 53% of the projected revenues for the three-month period were materialized.
Spending stood at 548.8 trillion rials ($14.4 billion) in Q1, up 48.8% over the first quarter of a year before. The figure accounted for 85% of the expenditure predicted by the government in the budget for the period. Revenues associated with the sales of oil, gas condensates and petrochemicals reached 188.9 trillion rials ($4.9 billion)—65% of what the government had expected to earn.
Tax revenues amounted to 181.9 trillion rials ($4.8 billion), indicating a 1.6% drop YOY. Budget deficit for the three months stood at 174.7 trillion rials ($4.6 billion), registering an 8.9% rise compared with the similar period of a year before.
Iran’s budget deficit has been increasing sharply during the past five years. The deficit for the last fiscal year amounted to $7.62 billion, according to CBI. The figure stood at $5 billion in the fiscal 2015-16 and $3.4 billion in the year before.
The widening budget deficit, resulting mostly from fundamental budgetary issues, has raised concerns that bigger financial problems will face the administration that is already grappling with serious challenges in terms of financial resources.