Iran’s budget deficit may amount to over $30B
Baku, Azerbaijan, July 17
By Elnur Baghishov - Trend:
Iran’s budget deficit of up to 1.5 quadrillion rials (about $35.8 billion) is expected this Iranian year (started March 21, 2019) due to a number of issues, including the US sanctions, Head of Tehran Chamber of Commerce, Industries, Mines and Agriculture (TCCIMA) Masoud Khansari said, Trend reports via TehranTimes.
The official went on presenting the TCCIMA suggestions for amending the budget bill, noting that “our first suggestion is to reform the subsidies, since every month over 8.9 quadrillion is allocated for subsidies.”
The TCCIMA head further suggested that at least part of such subsides (gasoline and energy subsides) should be eliminated and be paid directly to low-income classes of the society.
As the second suggestion, Khansari pointed to lowering the funding for the state-run companies and noted that the budgets allocated to such companies is almost three times the total budget in the long run, while state-owned companies are usually not that profitable.
“If the government would cut 10 percent of the budget allocated to these companies, many of the budget problems would have been solved,” he added.
The third and final suggestion was to eliminate the preferential official foreign currency exchange rate.
“Unfortunately, such dual rate system, not only has no merits and results in corruption in the country's economy, it also increases smuggling and leads to capital flight,” he said.
Khansari also criticized unnecessary bureaucracy in the customs, saying that custom administration data shows that more than four million tons of basic goods are piled up at the customs due to numerous regulations and inconsistencies, and it is necessary to take action in this regard.
Since the US reimposed sanctions on Iran in 2018, the country has been pressing to reduce its dependence on oil sales.
In Iran, the official exchange rate is used for the import of some essential products.
According to Central Bank of Iran, $1 equals to 42,000 Iranian rials and 1 euro equals to 47,096 rials.
In the black market, $1 is worth about 119,000-122,000 rials, while 1 euro is worth about 138,000-141,000 rials.