Nobakht: We have allocated 6,800 billion tomans for construction projects

Mohammad Baqer Nobakht, head of Iran's Management and Planning Organization, said on Thursday, "Despite all existing limitations in revenue collection and being under sanctions, the government has so far spent 6,800 billion tomans on construction projects." The approved budget for construction in this year's budget law is about 43,000 billion tomans, and with about six months into the year, around 20,000 billion tomans should have been allocated from this budget. However, according to the government spokesman, the amount allocated for construction budgets during this period has been 6,800 billion tomans. This allocation means that in the first half of this year, only 15.8% of the construction budget has been dedicated to construction projects. Previously, Masoud Khansari, head of the Tehran Chamber of Commerce, Industries, Mines, and Agriculture, criticized the severe reduction in construction budget allocations and warned about the "continuation of recession" in Iran's economy. According to Khansari, in the first five months of this year, construction budgets have either not been allocated to these projects or have been allocated at a rate of one or two percent. The head of the Tehran Chamber considers the reduction in construction budget allocations a factor in the continuation of recession and also stated that the non-payment of contractors' claims has led to layoffs and increased inventory reserves. This economic activist pointed out the emergence of a "demand crisis" and urged the government to "resolve the issues, as the economic situation is very dangerous and the continuation of recession harms the economy." The sharp decline in oil prices is the main factor in the failure to achieve government revenues in this year's budget, which has led to a decrease in the allocation of construction budgets. Mohammad Damadi, a member of the Parliament's Civil Commission, also recently stated in an interview with ILNA that five months into the year, the budget for ministries involved in construction, such as the Ministry of Roads and Urban Development, has not yet been paid. He said, "The season for executing construction operations is coming to an end, but we have no budget for building projects." Nevertheless, Valiollah Seif, the head of the Central Bank, expressed hope last week in an interview with the weekly Tejarat-e-Farda that "the economic growth in 2015 will be positive." According to the Central Bank governor's forecast, economic growth is expected to reach one percent this year. Seif also mentioned in the interview that "it is planned to achieve a three percent economic growth after the lifting of sanctions." Although Iran's economy has managed to maintain a downward trend in inflation rates in recent months, it has not made much success in exiting recession, which has been criticized by economic experts and analysts. It is expected that with the lifting of sanctions and the implementation of Iran's nuclear agreement with world powers, the process of foreign investors' presence in Iran's economy will be facilitated, so that perhaps Iran's economy can achieve higher growth rates more quickly.