Iran may use NDF to compensate budget deficit
Tehran, Iran, Dec. 6
By Milad Fashtami - Trend:
An Iranian MP said that the government may use National Development Fund (NDF) to compensate for the current year's budget deficit.
Iran's calendar and fiscal year starts on March 21.
Robert Biglerian, a member of the Energy Commission of Iran's Parliament (Majlis) told Trend news agency on Dec. 6 that the government can use the NDF funds to invest in the country's infrastructure development plans and even pay the current expenses.
"Considering the falling tendencies in oil prices, I think the next year's budget plan should be based on the price of less than $70 per barrel of oil," he said.
"The best exchange rate for the US dollar is also between 26,500-28,500 rials," he added.
The lawmaker went on to note that some of Iran's assets will be released based on the agreement reached between Iran and the P5+1 over Tehran's nuclear program.
"This will help the government continue its plan to contain the inflation despite budget deficit," he noted.
Iran is expected to face a budget deficit in the current Iranian calendar year (to end March 20, 2015), due to the sharp fall in oil prices.
Iran's current year budget envisages the price of $100 per barrel of oil. This is while each Iranian oil barrel is currently sold at around $80.
Based on Iran's budget law, the country is supposed to export 1.4 million barrels of oil (including gas condensate) per day.
Reports suggest that the country is daily earning $18-20 million less than the projected figure, so if the current tendency continues the total budget deficit may soar above $2.5 billion.
The Iranian President Hassan Rouhani also predicted that Iran's total oil revenues will be 30 percent less than expected.
Iran decided to sell its crude oil to Asia in November at the biggest discount in almost six years.
The decision was made after Saudi Arabia cut prices for all grades and to all regions for November. Qatar and Iraq decreased their prices as well.
Masoud Mir Kazemi, the head of energy commission in Iran's parliament and former oil minister told Mehr news agency on Oct.17 that according to the Oil Ministry's figures, Iran exported 0.1 million barrels per day less than the figure considered in the budget law, which will lead to budget deficit.