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Iran unveils first annual budget since US sanctions were reimposed

President of Iran Hassan Rouhani in the Kremlin (en.Kremlin.ru/Released)

This article was originally published by Radio Free Europe/Radio Liberty and is reprinted with permission.

Iran’s president has presented the country’s first annual budget since the return of U.S. sanctions, saying it had been adjusted to take account of Washington’s “cruel” measures.

Hassan Rohani submitted next year’s $47.5 billion budget to parliament on December 25.

The budget is less than half of last year’s, mainly due to the severe depreciation of the local currency following President Donald Trump’s decision to withdraw from a 2015 nuclear deal and reimpose U.S. sanctions.

The Iranian rial has fallen from around 42,000 to the dollar a year ago to around 100,000 today.

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The government in Tehran plans to fund 35 percent of the budget with oil revenues, projecting exports of up to 1.5 million barrels a day at a maximum of $54 a barrel. It did not say whether it envisages a deficit.

Public Sector Wages Increased

In a televised address to parliament, Rohani announced a 20 percent increase in public sector wages in a sign of the economic challenges Iran has faced since the sanctions were restored.

“America’s goal is to bring Iran’s Islamic system to its knees… and it will fail in this, but sanctions will no doubt affect people’s lives, and the country’s development and economic growth,” Rohani said.

Rohani said the sanctions will mainly affect Iran’s economic development and its poorer citizens.

The budget allocates $14 billion to import medicine, medical equipment and other necessities, slightly more than the $13 billion allocated last year.

The U.S. sanctions include an embargo on Iran’s key oil sector. The new budget did not say how many barrels of oil Iran hopes to sell in the next financial year, which starts in late March, but experts believe it will be considerably less than the approximately 2.5 million it sold per day prior to Washington’s withdrawal from the nuclear agreement.

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The budget was delayed several times in recent weeks amid reports that Supreme Leader Ayatollah Ali Khamenei had demanded unspecified changes to the final document.

The United States restored sanctions on Iran’s oil industry in November but granted waivers to a number of nations – including China, India, and Turkey — allowing them to continue imports in exchange for commitments to reduce them over time.