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Iran's economy needs serious reforms, can't afford to postpone issue anymore

Business Materials 6 January 2015 11:34 (UTC +04:00)

Tehran, Iran, Jan. 6

By Milad Fashtami - Trend:

Iran spends around 80 percent of its budget on current expenses, Iran's First Vice President Eshaq Jahangiri said.

If the current trend continues there will be no share of budget remaining for the construction sector, he said, Iran's Fars News Agency reported on Jan. 6.

"Iran's economy needs serious reforms," he said, adding that the country can't afford to postpone the reforms anymore.

The official further invited independent economists to help the government devise the country's Sixth Five-year Socio-Economic Development Plan (2016-2020).

A member of the Construction Commission of Iranian Parliament Alireza Khosravi told Trend Agency on Dec. 12 that next year's budget plan envisages 480 trillion rials (some $18.11 billion based on the official exchange rate of US dollar) for construction projects.

However, the MP said that the construction budget of next Iranian calendar year (to start on March 21) is not enough to finish the incomplete projects.

"In the current year, we had 3,000 incomplete projects, but we managed to allocate budget to only 300 of them," he said.

"The trend will continue in the next year, and we will not be able to fund all the incomplete projects," he added.

According to Khosravi, the government, parliament, and Judiciary can cut their current expenses to increase the country's construction budget.

"There are lots of incomplete projects, and current delays will only result in higher expenses," he said.

Iranian government submitted the $293-billion budget bill to Parliament on Dec.7. The budget of funding for running the government is $93.7 billion.

The proposed national budget is 4 percent more than current year. Next year's national budget bill is based on an oil price of $72 per barrel and a projected average exchange rate of 28,500 rials to the U.S. dollar for the fiscal year.

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