Iranian President Hassan Rohani’s new administration will focus on tackling the twin problems of soaring inflation and unemployment in the year starting 21 March 2014. Outlining details of the 2014-15 budget, the first of his four-year administration, Mr Rohani told parliament on 8 December that the draft budget for the Iranian year 1393 aims to curb recurrent spending and instead focus on capital investment. Parliament is due to debate the draft budget in the next few weeks.

The budget envisages the outlay of a total of IR7,830 trillion ($315bn, at the official exchange rate of $1=IR24,850). Although this is nominally an increase of 7.4% on the current year starting on 21 March 2013, in real terms, given inflation of over 40%, the budget has been slashed by over 20% (see table). In dollar terms (using official exchange rates) the collapse in the Rial means that budgeted spending for 2014-15 is a whopping 47% lower than for 2013-14. (CONTINUED - 1398 WORDS)