President Hassan Rohani has achieved what previous Iranian administrations have long aspired to, reducing oil revenues to just 25% of the budget. Of course, this isn’t down to non-oil sector growth, but rather the collapse of oil prices that has sent Brent below $30/B. The budget implies that Iran oil revenues wil fall by around 29% in real terms in the Iranian year beginning 21 March. But even this appears to be based on overly optimistic oil assumptions – either price, export volumes, or both.
Mr Rohani had delayed the unveiling of the 2016-17 draft budget until the lifting of international sanctions against Iran was officially announced on 16 January. The budget was drafted on the premise of complete sanctions removal. Presenting the post-sanctions draft budget to parliament on 17 January, Mr Rohani hailed their lifting as a major turning point for the country’s prosperity and for the creation of stability and security in the region. (CONTINUED - 1713 WORDS)