Nobakht: Government Budget Deficit Will Reach 31 Trillion Tomans by Year-End

The spokesperson for the Iranian government announced the "non-realization" of 31 trillion tomans of the expected government revenues in the budget for the year 1393 (2014) and stated that "naturally there will be difficulties." According to the IRNA news agency, Mohammad Baqer Nobakht clarified on Wednesday, January 7, that "our prediction is that we will have a non-realization of 31 trillion tomans by the end of the year, but we will manage the country." He added, "Of course, there will naturally be difficulties." Given the current dollar rate in Iran, which is 3,500 tomans, the government's budget deficit by the end of this year will be approximately 9 billion dollars. Nobakht's statements come after he mentioned on December 29 that if the price of oil reaches even 34 or 35 dollars, "the problem will be easily controllable." On Wednesday, the Iranian government spokesperson explained his earlier remarks: "Currently, the oil revenue set in the budget for the next year is 71 trillion tomans, and if this budget becomes zero, we will try to reduce the current and development budget by 71 trillion tomans." Previously, IRNA reported that oil revenues constitute 33 percent of the budget for the year 1394 (2015), while this figure was 50 percent for the current year. In the draft budget for the year 1393, the price of oil was predicted to be 100 dollars per barrel, but due to the unprecedented drop in oil prices in recent months, media and officials have reported the possibility of a budget deficit for the year 1393. Bijan Zanganeh, the Minister of Oil, reported to the Iranian parliament on January 3 about oil prices and predicted that oil prices would remain below 79 dollars until 2016. Ali Akbar Komijani, the Deputy Governor of the Central Bank, stated on January 4 that the real effects of the drop in oil prices will manifest in the last months of the year and "due to necessity, its greater impact will be on development budgets." In another part of his remarks, the spokesperson of the Islamic Republic government mentioned the referendum as one of the methods available in the constitution and added: "All this concern expressed with words that are unbecoming of the second-ranking official of the country and the system will not be wise or approved." Nobakht added, "Some may even consider my statements an insult to themselves, and I feel that the government is going to be placed under suspicion so that it always has a defensive stance, while we have not sought to create margins from the beginning, and I do not think such actions are appropriate in the context of sanctions and falling oil prices." In recent days, the statements of Hassan Rouhani, the President of Iran, regarding holding a referendum on important issues have faced severe criticism from conservatives and close associates of the Supreme Leader of the Islamic Republic. Hossein Shariatmadari, the representative of the Supreme Leader in the Kayhan newspaper, reacted to Rouhani's proposal about the referendum by stating that "the president, a jurist, does not know the difference between legislative and constitutional referendums." Ayatollah Ali Khamenei, the Supreme Leader of the Islamic Republic, also asked the officials of Hassan Rouhani's government on Wednesday not to create margins and to refrain from making unnecessary statements that could create division.