A Tragedy Named Budget 1402

A tragedy called the 1402 budget

When the government’s income and expenses don’t match

Last week, after much controversy, Ibrahim Raeisi presented the 1402 budget bill to the parliament. It was expected that the budget would not be accepted by the parliament after the presentation of the seventh development plan. However, it seems that Mohammad Bagher Ghalibaf was forced to retreat from his position of not accepting the budget and with a cold smile, he received the bill from the 13th government’s Prime Minister.

However, experts believe that contrary to what the government claims, the government’s proposed bill to the parliament can further strengthen the possibility of Iran’s economic collapse.

The 1402 budget bill was presented to the parliament at a time when the year-on-year inflation rate in Azar 1401 (November-December 2022) exceeded 485 percent, and many experts consider this rate as a criterion for evaluating the proposed government budget.

If we consider this factor, it must be said that Raeisi’s government has completely ignored the severe inflationary conditions of the country in presenting the 1402 budget bill. In other words, the cooking of the government’s planning organization can lead to a much greater disaster than what is currently happening in the Iranian economy.

The expansionary and indifferent budget of Raeisi’s government

The excessive and strange increase in government expenses in the proposed bill for 1402 has become a cause for concern among experts and economists. Comparing the budget of 1401 with the proposed bill for 1402 indicates a growth of over 42% in the government budget, exceeding 2 trillion tomans. This statement suggests the reality to the audience that the Planning and Budget Organization has planned the budget in a way that we should expect inflation rates of over 55% to 60% in the early months of the coming year.

What is the share of employee salaries?

The 42% increase in government expenses for 1402 has sparked many reactions, but the interesting point is that the increase in government employee salaries for the coming year is only 20%. In other words, the government has decided to increase employee salaries by half the average increase in its own expenses for 1402.

Therefore, it can be said that this year, unlike the previous year, the government cannot blame the inflation of the coming year on the employees and minimum wage earners, because for example, the budget of some institutions has increased by more than 60% to 65%. In other words, to find the root of the inflation in 1402, we must look for another source other than the salaries and benefits of employees and minimum wage earners.

1402 also smells like oil.

The budget bill for 1402 has been prepared under the assumption that daily oil exports will be around 14 million barrels of oil and its gas equivalent. This is despite the fact that the Planning and Budget Organization of the government has predicted the oil price for 1402 to be around $85 per barrel. However, many experts believe that this price is overly optimistic.

Therefore, it can be said that the government has projected oil revenues for the coming year to be equivalent to 604 trillion tomans. In other words, according to the expectations of the Planning and Budget Organization, oil revenues in 1402 will account for 304% of the public resources.

In fact, it can be said that the government has set a more oil-dependent budget for the coming year than ever before, as this figure is much higher than the average of the past decade. Considering the sanctions and intensified international pressures, it is almost impossible to achieve this.

This is while oil revenues in the first six months of the current year have only realized 56% of the expectations of the 1401 budget, and the government is practically lagging behind in oil exports. However, the Planning and Budget Organization has predicted that the government will not only have higher income from this source next year, but also increase it by up to 30%.

It will worsen the state of affairs in the parliament.

It has become a constant experience that budget bills presented by the government to the parliament have been manipulated by representatives, especially the Budget Integration Commission. Hassan Rouhani had also mentioned about the 1400 budget bill, stating that there is a budget deficit of 400 trillion tomans due to interventions by representatives in the budget bill.

Of course, these interventions have occurred in different periods of the parliament, but the 11th parliament has proven to be the most influential in this regard. Therefore, it is expected that the 1402 budget will be even more inflationary than what has already been labeled as a catastrophic situation by economists.

In this regard, articles titled ‘The 1402 Budget: President Raisi’s New Masterpiece in Iran’ have been published on Gate. Additionally, articles related to Iran’s economic situation titled ‘In 1402, We Should Expect Hyperinflation’ have been published.