In its latest report, the Majlis Research Center has announced a 61% growth in the government and state-owned companies’ debt in 2022 compared to September 2023.
According to the report, published on September 3, the government’s debt has reached 12,480 trillion rials (approximately $24.960 billion) with a 30% growth during the mentioned period, while the debt of state-owned companies has peaked at 18,910 trillion rials (approximately $37.820 billion) with a 90% growth.
The total debt of the government and state-owned companies was estimated to be around 31,380 trillion rials (approximately $62.760 billion) by the end of the previous year, equivalent to approximately 29% of Iran’s Gross Domestic Product (GDP).
However, the report specifies that there are discrepancies and unregistered items in the national treasury regarding certain claims by creditors. If these figures are taken into account, the debt-to-GDP ratio would increase.
The release of the recent report on the government’s debt by the Research Center comes while regime Supreme Leader Ali Khamenei recently praised the performance of President Ebrahim Raisi’s government on August 30, claiming that “a significant number of macroeconomic indicators indicate growth and progress.”
The International Monetary Fund has assessed Iran’s government debt-to-GDP ratio at around 34% or $120 billion for 2022.
The IMF report, published in May, indicates that Iran’s government debt has surged from $49 billion to $120 billion over the past two years, effectively doubling from 2020 to 2022.
This spike in government debt comes at a time when the regime’s president, Ebrahim Raisi promised to control government borrowing during the presidential election and curb inflation by controlling liquidity.
He has also recently claimed that “all economic indicators of the country are on a growth path,” while recent statistics show that the government’s debt has exceeded 31 trillion rials (approximately $62 billion).
In recent years, various governments, due to overestimation of oil revenues in the budget and their non-realization, have been forced to extensively borrow from financial institutions, including the Central Bank and other banks, the National Development Fund, and so on.
Mehdi Ghazanfari, the head of Iran’s National Development Fund, said in May that 67% of the $150 billion resources of the National Development Fund have been withdrawn by governments.
The Majlis Research Center had also reported in August that the average monthly withdrawal of governments from the National Development Fund during Mahmoud Ahmadinejad’s presidency was around $453 million, during Hassan Rouhani’s presidency it was $700 million, and during Ebrahim Raisi’s presidency, it reached $1.1 billion.
As a result of such extensive and escalating borrowing, the government has forced the Central Bank to print unsupported banknotes, leading to a surge in liquidity and, consequently, soaring inflation in the country.
According to the World Bank’s estimate, Iran’s inflation rate was 49% last year, and the price growth of food items in Iran has the highest rate in the world after Venezuela, Lebanon, Zimbabwe, and Argentina.
