DUBAI: The first state budget proposed by Iranian President Hassan Rowhani has sailed through parliament, handing him a political victory as he seeks to build domestic support for international negotiations on the country’s nuclear programme.
Parliament approved on Sunday a budget bill worth 7,930 trillion rials ($319bn at the official exchange rate) for the next Iranian calendar year, which starts on March 21, official media reported.
The budget slows growth in spending in an effort to repair state finances that have been ravaged by economic sanctions. Expenditure is to rise about 9 percent from the original budget plan for the current year - not nearly enough to keep pace with inflation, which is running near 40 percent.
“Everything passed by parliament is acceptable to us. There are only a few differences but they are not major,” a deputy to Rowhani, Vice President for Parliamentary Affairs Majid Ansari, was quoted as saying by the IRNA news agency.
Rowhani, who took power last August after elections, needed only 10 days of debate to get his budget passed, an apparent endorsement of his administration as it tries to get the sanctions lifted by reaching a deal with world powers on Iran’s disputed nuclear plans.
His budget suggests he views spending discipline as key to rescuing the economy; the nine percent rise in his plan is much lower than the 31 percent increase envisaged in Ahmadinejad’s last budget.
Iranian-born economist Mehrdad Emadi, of the Betamatrix consultancy in London, said that after years in which Ahmadinejad tried to offset the economic sanctions with huge jumps in government spending, Rowhani was starting to reimpose normal budget constraints, a process that would take years.
“He is addressing serious problems like the fact that Iranian banks have started to face rial shortages,” Emadi said. “The budget begins to address these problems and is designed to rein in inflation.”
REUTERS
