Iranian government cuts operating budget by around $5bn

Iranian officials say projections for government’s operating budget in the current Iranian calendar year which will end in March should be cut by around $5 billion as the government seeks to mitigate the impacts of sanctions on its oil revenues.

Two senior government officials said over the weekend that estimates for the budget of the administrative government, which includes revenues and spending, should be cut by a total of 6,200 trillion rials, (around $4.770 billion) this year.

Government spokesman Ali Rabi’ei said in an article for the Iran newspaper on Saturday that authorities had slashed official projections for government revenues in the 12-month period ending next March to 3,860,000 trillion rials ($29.692 billion), down more than 17 percent from 4,480,000 trillion rials ($34.461 billion) allowed in the draft budget approved by the Iranian parliament last year.

Rabi’ei called the move an “important economic decision” and said the government led by President Hassan Rouhani was determined to pursue a series of “structural reforms in the budget” to ensure economic stability at the time of sanctions.

Head of Plan and Budget Organization of Iran has also confirmed the figures. Mohammad Bagher Nobakht said during a trip to the eastern province of Yazd on Sunday that the government had to cut by around a third its projected budget of $5 billion for construction activities.

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Nobakht said Iran was under some of the “most difficult sanctions” ever, saying the government was serious in making cuts to be able to finish some key projects across the country.

Iran has been under some tough economic sanctions since the United States unilaterally withdraw from a major international deal on the country’s nuclear program last year.

The government has sought to offset the impacts of declined oil sale through savings while it has implemented plans to diversify the economy and to reduce its dependence on oil revenues.

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