Iran's Government Debt to Central Bank Increased by 72% in June

New statistics from the Central Bank indicate a 72% increase in the government's debt to the Central Bank in June this year compared to the same month last year. Additionally, the total debt of the government and state-owned companies to the Central Bank and other banks in the country has surpassed 1.5 quadrillion tomans, which is 37% more than in June last year. Of this amount, over 1.3 quadrillion tomans pertains to the government's own debt, while the remainder is related to the debts of state-owned companies to the banking system. The government's debt to the banking system is equivalent to six months of the government's general budget, and it is unclear how the government plans to repay this enormous debt. Furthermore, the government's banking debt is only a small part of the total government debt; the National Development Fund also claims over 100 billion dollars from the government, which is equivalent to 2.5 years of the government's general budget. The International Monetary Fund, in its spring report, stated that the total government debt of Iran last year was equivalent to 28.5% of the country's total gross domestic product. The significant jump in the government's debt to the banking system comes despite the fact that the thirteenth government, led by Ebrahim Raisi, promised at the outset to stop borrowing from the banking system to control liquidity and inflation; however, over the past three years, the government's debt to the country's banks has doubled. Central Bank statistics show that liquidity in the country has surged to an astronomical 8.5 quadrillion tomans, marking a 27% increase compared to June last year. Economic experts have identified uncontrolled liquidity as the main factor driving inflation in Iran. In recent years, the Iranian government has forced the Central Bank to print unbacked currency to cover budget deficits, allowing it to borrow both directly from the Central Bank and from other banks; as a result, inflation in Iran has consistently remained above 40% over the past three years, and the value of the national currency has decreased by more than half.