Tehran, Iran, Dec. 29
By Milad Fashtami - Trend:
Iran's Vice President for Planning and Strategic Supervision Mohammad Baqer Nobakht said Dec. 29 that the country will not face any budget deficit in the current Iranian calendar year (to end March 20, 2015).
"Budget deficit happens when the revenues are not provided but the government needs to spend the money. In our case, the oil revenues projected in the budget plan have not been materialized, but the government is not going to spend the money, so it's rather not materialization of revenues rather than budget deficit," the official explained, Iran's ISNA News Agency reported.
"Even if the oil prices fall to $35 per barrel, we can handle the situation," he said.
"Nigeria has based its budget on $73 per barrel, and Saudi Arabia reportedly settled for $80 per barrels, so Iran's $72 per barrel seems to be realistic," Nobakht said, adding that some analysts believe that the price will bounce back to $80 per barrel.
However, the official went on to say that in general it's safer to base the budget plan on lower prices.
Falling global oil prices forced Iran's government to decrease the oil price figure in the proposed budget bill for the next Iranian calendar year to $72 per barrel from the current figure of $100.
Iran is expected to face severe budget deficit in the current Iranian calendar year (to end March 20, 2015).
The country 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.
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 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.
Experts believe that due to the continuing fall of oil prices in global markets, a budget deficit in the next calendar year is also inevitable.
Edited by CN