Iran General NewsIran faces $44 bln deficit

Iran faces $44 bln deficit

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ImageAFP: Iran faces a budget deficit of 44 billion dollars in the financial year starting in March, according to a parliamentary research centre report published in the press on Monday.

ImageTEHRAN (AFP) — Iran faces a budget deficit of 44 billion dollars in the financial year starting in March, according to a parliamentary research centre report published in the press on Monday.

The research centre said the government's "expansionary budget bill" plans expenditure of 103 billion dollars against projected income of 59 billion dollars, according to the Sarmayeh newspaper.

And it warned that the budget bill could be in for a rough ride when parliament starts debating it on February 28.

The centre said the government plans to cover the hefty deficit from overdue taxes, dividend income from state-owned companies and 11 billion dollars from the Oil Stabilisation Fund.

Hardline President Mahmoud Ahmadinejad has faced strong criticism from economists for his inflation-stoking withdrawals from fund, which is made up of any oil revenue that exceeds the budget forces and was set up to guard against oil price fluctuations and to finance private sector projects.

Iran, where an estimated 80 percent of the economy is controlled by the state, is reeling under massive inflation which peaked at 29 percent in September and is currently hovering around 24 percent.

Last month, Ahmadinejad submitted to parliament an overall budget of 282.7 billion dollars for the year to March 2010, a figure which includes the government's fiscal plan plus 202 billion dollars from state-owned firms.

The budget forecasts are based on a oil price of 37.5 dollars a barrel, sharply lower than the peak of nearly 147 dollars seen in the middle of last year.

But the research centre warned: "If the oil price maintains the current (downward) trend, the budget will further face a foreign currency shortage."

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