With the Iranian economy practically decimated, Iran’s major woes, as a result, are the low production rates, and high unemployment levels. With the country’s 2022-2023 budget announced last month, it appears that this has completed neglected both factors.
The Iranian regime’s president Ebrahim Raisi announced his government’s budget for the Persian year of 1401 (which begins in March 2022) and claimed that it would result in 8 percent of economic growth. On the other hand, regime experts have acknowledged that his budget will only increase the poverty that Iranians are already suffering from.
Last month, the state-run Setar-e Sobh daily wrote that the Ministry of Cooperatives, Labour and Social Welfare had suggested back in 2019 that the number of Iranians living below the poverty line would be at 30 million by 2021.
For the regime’s 2022-2023 budget, the resources include: Iran’s oil export (1.2 BPD); an increase in taxes; the sale of government securities and bonds; a reduction in salaries in accordance with the rising inflation rate; and the limited revenue received from petrochemical and steel exports.
Selling oil, especially 1.2 BPD, is impossible due to the international sanctions and the damaged infrastructures of Iran’s oil sector. Even selling oil at $60 per barrel would not cover the regime’s expenses entirely. It is worth noting that the oil market has had a significant decline and fluctuated due to the Covid-19 pandemic.
According to Iran’s state media, the balanced budget is 15,052 trillion rials, which equates to 50.2 billion dollars at the free-market exchange rate of 300,000 rials to every dollar.
As expected, the largest share of the budget has been allocated to the regime’s military affiliations, including the Army and the Islamic Revolutionary Guard Corps (IRGC), the latter of whom have a prominent control over Iran’s economy. Several institutions controlled by the regime’s Supreme Leader Ali Khamenei are set to receive a great share of budget funds also.
Alongside the resources mentioned in the budget bill, the sources of money that the regime has not been so forthcoming about include: the printing of banknotes; service revenues; the extraction of cryptocurrencies; and the income from the capital market.
What is evident from the new budget bill is that the regime has no desire to increase production within Iran, and this includes the increase of agricultural, livestock, and industrial production rates.
It is worth noting that the country’s liquidity will increase by banknote printing. The inflation rate will soar since the regime refuses to increase production and employment.
This situation is what has led the regime to find itself at the bottom of the table in the global statistics of entrepreneurship, ranking 41st out of 45 countries in the 2020 report of the Global Entrepreneurship Watch (GEM) consortium.
Notably excluded from the budget bill are the Iranian people and their demands, given the dire socio-economic issues they are facing daily.
The state-run ILNA News Agency wrote on December 13, 2021, that, “The least attention has been paid to the welfare of the family in the country’s budget.”
They suggested that during 2022, we will witness the gap within society widening further, along with an increase in ‘relative poverty and absolute poverty’.
In a nutshell, the Iranian regime has dug deeper in people’s pockets by increasing taxes, banknote printing, inflation, and hiking prices of basic goods and essential foodstuffs.