News ID: 209950
Published: 0414 GMT February 13, 2018

Rouhani administration faces no budget deficit despite unfulfilled income target

Rouhani administration faces no budget deficit despite unfulfilled income target

An assessment of the Iranian government's financial condition during March 21-December 20, 2017, shows that although the Rouhani administration has failed to acquire more than $8.1 billion in pr+edicted monetary resources, its figures are not indicative of a budget deficit.

The government's revenues during a fiscal year (starting mid-March) depends on three main public sources: 1. Taxes, 2. Revenues generated from exports of oil and its byproducts and 3. The handing over of financial properties mostly in the form of issuing bonds. For the year to mid-March 2018, the government had predicted a revenue of $70.61 billion from the public resources and had planned its budget accordingly.

It was stipulated in the approved budget bill for the year to March 2018 that the government would earn $35.51 billion from taxes as well as its other income sources, $24.28 billion by exporting oil and its byproducts and $10.81 billion by handing over financial properties. Therefore, the government approved to earn $26.85 billion from taxes and its other income sources, $18.36 billion from selling oil and its byproducts in foreign markets and $10.95 billion from conceding its properties during the nine-month period to December 20, 2017.

A report by the Central Bank of Iran on the government's performance during March 21-December 20, 2017, indicates that out of its total predicted income, the Rouhani administration only managed to earn $19.44 billion from taxes and $13.06 billion by exporting oil and its byproducts, showing deficits of $7.34 billion and $5.3 billion, respectively. This is while, as per the income pertaining to the handing over of the properties, a surplus of $4.08 billion was acquired, indicating that the government had extensively issued bonds.

As per the government’s major expenditures, there are two main expenses: 1. Paying wages and salaries and 2. Allocating development budgets. For the year to mid-March 2018, the Rouhani administration approved $51.79 billion for its current expenditures, $14.48 billion for allocating development budgets and $4.28 billion for owning financial properties. Thus, the government should have spent $39.18 billion on its current expenditures, $11.02 on development budgets and more than $3.26 billion on possessing financial properties during mid-March-mid-December, 2017. This comes as the Rouhani administration's performance during the same duration indicates that it has spent only $33.36 billion on its current expenditures, which is $6.12 billion less than the approved amount.

In addition, as far as the development budgets are concerned, during the nine-month period to December 20, the government’s allocated amount is $4.69 billion less than the approved figure, standing at $6.12 billion. However, the amount spent on possessing properties in this period almost equals the approved figure of $4.4 billion.

In general, out of the total $70.61 billion worth of financial resources predicted for the year to mid-March 2018, some $53.26 billion should have been acquired during the nine-month period to December 20, 2017. However, the government’s performance in this period indicates that only $44.69 billion materialized, showing a deficit of $8.57 billion compared to the predicted amount. On the other hand, to cover the $70.61-billion expenditures, the government should have allocated $53.26 billion, whereas, it has only spent $44.08 billion. On the whole, these figures indicate that in the same duration, the government failed to cover $9.38 billion of the expenses due to its failure to acquire the targeted financial resources.

Nevertheless, although the government failed to generate its target income during mid-March-mid-December, 2017, it did not face a budget deficit. This comes as Iranian statesmen have repeatedly announced that the government will not face a budget deficit in the year to March 2018.

   
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