Iran Budget: Inflation Wipes Out Spending Hike As Economic Downturn Bites

Iran has revised its 2019-20 budgeted spending up by 8.7% from the draft budget unveiled in December.

The budget law for the Iranian fiscal year starting 21 March projects spending of IR5,300trn ($89.7bn at the budget exchange rate of $1=IR58,000), up from the initially projected IR4,786trn ($82.5bn: MEES, 18 January ). The budget law has now been submitted to the Plan and Budget Organization (PBO) for implementation.

The general budget, which is nominally balanced, is based on a seemingly conservative oil price assumption of $54/B – key export grade Iran Heavy averaged $58/B over January and February and prices are trending upwards. Projected exports of oil and condensate of 1.0-1.5mn b/d appear reasonable, although this covers a huge range. (CONTINUED - 1076 WORDS)