A senior official of the Islamic Republic government has reported an 'additional burden' imposed on the budget bill by the Islamic Consultative Assembly amounting to '400 trillion tomans'. According to the ILNA news agency, Sepehr Khalaji, head of the Government Information Council under President Ebrahim Raisi, stated that 'more than 400 trillion tomans of additional burden has been created on the budget' and if this continues, 'its inflationary effects will affect society next year.' He claimed that negotiations have begun in various sectors to overcome this situation and added that if such financial burdens remain on the government, a budget deficit will be inevitable. Based on estimates from some experts and a discussion by Voice of America with economic analysts, the unprecedented growth of liquidity in Iran in recent years has been due to the Islamic Republic's irregular borrowing from banks to cover the 'budget deficit' along with major disorganized banking actions such as 'issuing unbacked money'. On January 26, the 'Planning and Budget Organization', which operates under the Islamic Republic government, issued a statement announcing that members of the budget integration commission had approved multiple supplementary provisions that had not been financially supported or anticipated, despite the government's representatives' objections. During a public session on December 21, the parliament rejected the overall budget bill for the year 1403 proposed by President Ebrahim Raisi with 91 votes in favor, 127 against, and 10 abstentions. The budget bill was sent back to the parliament after further amendments, and its overall framework was approved in a public session. The main criticisms of next year's budget include a deficit of '300 - 500 trillion tomans', an increase of nearly '50 percent' in taxes, a '20 percent' increase in the minimum salaries of government employees, its inflationary nature, and neglect of the majority's livelihood. The details of the proposed budget for the year 1403 are still under review in the parliament. Meanwhile, the 'Seventh Development Plan', which is supposed to align with the 1403 budget, is still in a back-and-forth process between the parliament and the Guardian Council and has not been finalized.
Government and Parliament Accuse Each Other; A Government Official: The Inflationary Effects of Budget Changes Will Affect Society
A senior government official has accused the parliament of imposing a significant financial burden on the 1403 budget, which could lead to inflation and a budget deficit. The ongoing conflict between the government and parliament highlights the challenges in managing Iran's economy amidst unprecedented liquidity growth and tax increases. This situation is critical as it impacts the livelihoods of the Iranian populace.
👥 Key Players
📰 What Happened
A senior government official has accused the Iranian parliament of adding a significant financial burden to the 1403 budget, which could lead to inflation and a budget deficit. This conflict highlights ongoing economic challenges in Iran, including rising liquidity and tax increases.
- The parliament rejected the overall budget bill for the year 1403, citing a deficit and inflationary concerns.
- The government claims that the additional burden imposed by parliament amounts to 400 trillion tomans.
💡 Why It Matters
📚 Background
Iran has been facing significant economic challenges, including high inflation and liquidity issues, exacerbated by government borrowing and mismanagement. The budget process is a key area where these economic policies are debated and enacted.
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