Iran’s President Acts to Avoid Budget Shortfall, Food Shortages

Iranian President Hassan Rohani’s new government set to work on overhauling the Ahmadinejad administration’s “unrealistic” budget to prevent shortfalls and ensure the availability of basic goods until spring time.

At the cabinet’s first meeting yesterday, ministers agreed this year’s budget will be reviewed and a new version presented “within two weeks maximum,” the Tehran-based newspaper Donya-e-Eqtesad said in today’s edition. Iran’s fiscal year ends on March 20, 2014.

Current projected revenue won’t be met and the budget will be reviewed to avoid overspending, deputy for planning Mohammad Bagher Nobakht said Aug. 17, according to the state-run Fars news agency. First Vice-President Eshagh Jahangiri said a planning official from the government of former President Mahmoud Ahmadinejad told him in a meeting recently that a third of the revenue stated in the budget is “unrealistic,” Fars said in a separate report yesterday.

Rohani, inaugurated Aug. 4, has pledged to waste no time fighting inflation topping 35 percent and unemployment of about 12 percent amid international sanctions that squeeze Iran’s economy, have cut the nation’s crude oil exports and restrict its access to foreign currency.

Parliament last week approved 15 of Rohani’s nominees for cabinet. He has appointed three caretakers in the meantime to head the ministries of education, science and sports while he searches for new nominees to bring before parliament.

Imports Stranded

The cabinet also decided yesterday that the Central Bank and related ministries will take action to clear stranded essential imports through customs, Donya-e-Eqtesad said. Four million tons of food and medicines are stuck because of a bureaucratic dispute, the Tehran-based Shargh newspaper said Aug. 1.

Trade officials had warned that unless the dispute is resolved quickly, the goods will perish, subjecting Iran to basic food shortages in coming months.

After yesterday’s cabinet meeting, Rohani said “necessary decisions” were taken regarding essential goods, the state-run Iranian Students News Agency reported. Before he was confirmed as industry and commerce minister, Mohammad Reza Nematzadeh said prices of imported essential goods would remain unchanged until the end of the Iranian year.

The cabinet also rolled back 10 measures passed by Ahmadinejad’s government providing benefits the budget could not pay for, today’s Donya-e-Eqtesad said, without elaborating.

Rohani also instructed ministries to propose measures to help Iranians make ends meet that he can take in his first 100 days in office, the daily said.

bloomberg