Iran borrows $6.5 billion to pay subsidies

Iran Materials 15 February 2012 12:50 (UTC +04:00)

Azerbaijan, Baku, Feb. 15/ Trend M. Moezzi

The government of President Mahmoud Ahmadinejad has had to borrow $6.5 billion from the Central Bank of Iran (CBI) to pay for its targeted subsidies programme, an MP has told Fars news agency.

A written report to the Majlis (parliament) by Iran's Supreme Audit Court says the treasury has borrowed money from the CBI on two occasions to enable it to have the cash it pays Iranians for the targeted subsidies programme, said Gholamreza Mesbahi Moghadam a member of the Majlis' economic commission.

One withdrawal was $2.9 billion from oil revenues and another was about $3.4 billion from the water, electricity and bread subsidies' monies.

Iran's year-old targeted subsidy programme is designed to pay each citizen $45 a month while eliminating subsidies for energy and commodities. The government was expected to save $54 billion in one year.

Next year's budget (Iran's solar year ends on March 20) assigns no figure for the second phase of the subsidies programme said Mr. Mesbahi Moghadam. Instead, the government will provide details in a supplement to the budget, he added.