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Iran’s development fund to grow richer in coming fiscal year

Business Materials 11 December 2017 08:53 (UTC +04:00)
Iran’s strategic National Development Fund is likely to grow in deposit in the coming fiscal year (to start March 21), a survey of the newly-proposed budget bill shows
Iran’s development fund to grow richer in coming fiscal year

Tehran, Iran, Dec. 8

By Mehdi Sepahvand – Trend:

Iran’s strategic National Development Fund is likely to grow in deposit in the coming fiscal year (to start March 21), a survey of the newly-proposed budget bill shows.

According to the bill, which was finalized by the government on December 6, the government would have to allocate 32 percent of its oil revenues to the fund.

However, the factor that would make the fund richer in comparison to previous years is the large margin that the government has considered between its proposed oil price for the year concerned and the current prices in the global market.

The bill puts the oil price for the coming year at $49 per barrel. This is while Iran’s crude price surpassed $60 per barrel in November.

Nevertheless, a recent OPEC agreement to keep output capped also raised hopes for stable prices. Mohammad Ali Khatibi, former Iranian representative at OPEC, told Trend that preservation of the cap was a sign of common ground among politically diverse powers, adding that the producers would prefer prices remain somewhere between $60 and $70 per barrel.

According to Iranian law, if oil is sold at a higher price than what is stated in the budget bill, the surplus revenue will be deposited at the National Development Fund.

The fund has proven a handy tool for the Iranian administration in recent years, particularly in addressing uneven development at remote areas of the country.

Having recognized poverty as a major factor to the growth of terrorism, over the past two years the Iranian government has allocated once $500 million and once more $1.5 billion to developmental projects in such areas as a basic measure to reduce the threat of terrorism infiltrating the country from underdeveloped border areas.

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