The government’s heavy debts are one of the major challenges facing the current economy of Iran’s regime.
The Central Bank of Iran recently released statistics on the state of monetary and credit variables.
These statistics illustrate the government’s debt to the Central Bank and other banks.
An analysis of these figures shows that Ebrahim Raisi’s administration significantly increased borrowing from banks in its final months.
By the end of July 2024, the government’s debt to the banking network reached 16,000 trillion rials (approximately $22.857 billion).
Additionally, the government’s debt to the Central Bank rose to around 4,900 trillion rials (approximately $7 billion).
This is in contrast to the beginning of the 13th administration (Ebrahim Raisi’s government), when debts to the banking network and the Central Bank were 6,440 trillion rials (approximately $9.2 billion) and 2,010 trillion rials (approximately $2.871 billion), respectively.
These figures have seen significant jumps in less than three years, with debt to the banking network increasing by 148% and debt to the Central Bank rising by 128%.
According to the latest statistics, public sector debt to the banking network reached 16,540 trillion rials (approximately $23.628 billion) by the end of August 2024.
This figure represents a 38.6% increase compared to the same period last year.
The growth rate of public sector debt to the banking network under Raisi’s government reached 14.2% from March to August 2024.
In comparison, the growth rate of public debt in the same period last year was only 6.3%.
According to this report, about 2,600 trillion rials (approximately $3.714 billion) of public sector debt to the banking network belongs to state-owned enterprises.
The direct debt of the government to banks has also reached 13,940 trillion rials (approximately $19.914 billion).
Debt to the Central Bank
Studies indicate that public sector debt to the Central Bank reached 4,920 trillion rials (approximately $7.028 billion) by the end of August 2024.
Of this amount, the government’s debt is 3,320 trillion rials (approximately $4.742 billion), while state-owned enterprises owe around 1,600 trillion rials (approximately $2.285 billion).
The analysis reveals that the year-on-year growth rate of government debt increased from 25.2% in August 2023 to 69.4% in August 2024.
Gholamreza Salami, a government-affiliated economist, stated that “the official figures for government debt are around 7,750 trillion rials (approximately $10.785 billion), but these statistics are misleading.”
According to him, when all debts are accounted for, the government’s total debt surpasses the country’s gross domestic product (GDP).
Salami explained that “the total government debt amounts to $400 billion.”
At the free-market exchange rate of 700,000 rials per dollar, this figure translates to 280 quadrillion rials.
This figure is equivalent to 231 times the entire 2024 budget, which was set at approximately 64,790 trillion rials (about $96.842 billion).
Salami also stated that “the government owes 11,000 trillion rials (approximately $15.714 billion) to banks, half of which was accumulated during Raisi’s three-year tenure.”
He added that the government’s debt to the Social Security Organization amounts to 7,000 trillion rials (approximately $10 billion), while other government debts, including three-year maturity bonds, reach about 8,500 trillion rials (approximately $12.142 billion).
The government also carries substantial debt due to accumulated losses of banks and state-owned enterprises. State-owned companies like Bank Melli and Bank Sepah have recorded significant historical losses.
Pension Fund Deficits
The national and military pension funds have also become a serious challenge for Iran’s economy.
According to calculations, the deficit for these funds in 2024 exceeds 4,000 trillion rials (approximately $57.142 billion).
The increase in government debt to banks during Raisi’s administration has not only failed to decrease but has grown further. This trend has placed heavy financial pressures on Iran’s economy.
