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Iranian Government Faces Unbalanced Budget

04 Jan, 2016

Vistar Business Monitor

Despite repeated optimistic forecasts about the economy, the Iranian government has failed to balance the budget and says it is facing a shortage of funds to pay the salaries of public employees.

In recent months, the salaries of government employees have not been paid on time and there is concern that the same trend will prevail in the next three months. Also a number of development projects approved by the government have not received the funds to get started.

So far 70 percent of expected tax revenues has so far been collected, adding that the anticipated oil revenues have been correct.

There have been some contradictory reports about the effect of falling oil prices on the government budget. While the spokesman for the government announced earlier that the government is able to run the administration on revenue from oil selling at 40 dollars per barrel, the vice president has been quoted as saying that they had not prepared for oil prices below 60 dollars a barrel.

Another problem the government has faced is the payment of monthly benefits set up during the former administration as a means of cushioning households from the scrapping of government subsidies for energy and food staples. The government does not dare cut off the benefits being paid to about three million recipients who are in fact ineligible to receive them due to high incomes.

Reports indicate the government will have a budget shortfall of 51 trillion tomans at the end of the Iranian calendar year in March.


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