Ahmadinejad seeks spending hike in new Iran budget

Zee News (India) ^ | 21JAN06 | Zee News

[familyop]

Tehran, Jan 21: Iranian President Mahmoud Ahmadinejad on Sunday unveiled his second annual budget, forecasting a sharp 20 percent increase in spending but lower oil revenues for OPEC's second largest exporter.

The President asked the parliament to approve a budget of 2,290 trillion rials (about 248 billion US dollars) for the next Iranian year starting on March 21, a 19.6 per cent rise on current expenditure.

It was based on projections that Iranian oil will sell for 33.7 dollars a barrel, compared to 40 dollars in the current year's budget.

"The future is not predictable. It is possible that our enemies want to reduce oil prices to hurt us, that is why we have set the price at 33.7 dollars per barrel to show we are ready for anything," Ahmadinejad told Parliament.

"Even if they reduce oil prices we will be ready to handle it," he said.

Iran's economy is heavily dependent on oil revenue, which accounts for 80 per cent of total exports earnings and cover more than 50 per cent of the state budget.

Bureau Report

[WorkerbeeCitizen]

Ahh - he is a liberal. Spendig money he don't have.

[familyop]

I'll add a fact or two. Iran is a theocracy, and the government owns almost all of the businesses there. The mullahs can, in essence, veto whatever they like and institute what they like. The rest of the government, including Ahmadinejad, is not much more than a facade.

[WorkerbeeCitizen]

Thanks for the reminder. It is sometimes difficult for me to think in theocratic terms.

[familyop]

I agree with what you wrote. The various forms of very centralized government are all bad, IMO, and they do resemble each other in important ways.

[AdmSmith]

Iran and Kuwait set oil price below $40
Bahrain Tribune - 22/01/2007

(MENAFN - Bahrain Tribune) The price of oil could be well below $40 a barrel this year according to two leading producers.

In setting its annual budget yesterday Kuwait used an oil price of just $36 a barrel in calculating spending and income for the year. At the same time Iran took an even more conservative outlook for the future price of crude, setting its budget based on an expected price of $33.7 a barrel.

Kuwait Finance Minister, Bader Al Humaidhi, said that revenue estimated for the year were $28.88 billion, down slightly on last year's $29.58 billion.
And in Iran President Mahmoud Ahmadi Nejad said: "We made the economic planning in a way that we'll do our job even if the oil price drops," Nejad said, adding the modest price set on the exported oil was to make sure that "if something happened (Iran) would be ready." He also said in order to lessen reliance on oil income, the official parity or conversion rate of the dollar to the Iranian rial has been lowered from IRR8,950 to IRR8,900 to the dollar.
The rate is a little higher in the open market.

Nejad said in line with reducing reliance on the oil income, the consumption of foreign exchange would be reduced from this year's $38.2 billion to $29.5 billion next year.

http://www.menafn.com/qn_news_story_s.asp?StoryId=1093139942