Iran’s administration faces $392 million monthly deficit for paying cash subsidies

Photo: Iran’s administration faces $392 million monthly deficit for paying cash subsidies / Iran

Baku, Azerbaijan, April 29

By Umid Niayesh - Trend:

Iran's president has announced that the government spends about $1.4 billion per month on the cash subsidies for citizens.

The cash subsidies impose about $392 million (based on the official rate of 25,500 rials per each USD) deficit in budget per month for administration, Hassan Rouhani said in a live TV interview which broadcasted on state TV Channel 1 on April 29.

Rouhani went on to say that the administration decided to increase the energy carrier prices to eliminate the negative economic effects of the cash subsidies.

The prices increased averagely by 50 percent, Rouhani said, adding that it will not lead to serious increase of other goods' prices.

Rouhani also said that Iran's administration successfully has implemented its economic plans for last Iranian calendar year (ended on March 20).

Iran will officially start implement the second phase of the subsidy reform plan in next days, however the prices of fuels including gas, gasoline, gasoil and electricity has been increased.

The subsidy reform plan is aimed at easing pressure on state finances by cutting tens of billions of dollars from government subsidies on food and fuel. The government pays cash to citizens as compensation for increased prices by cutting subsides.
The subsidy reform plan pays 455,000 rials (about $18 based on the U.S. dollar official exchange rate of 25,500 rials) to Iranians, eliminating subsidies for fuels and some commodities.

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