The 2023 Budget: The New Masterpiece of Raisi’s Government
Maintaining People’s Purchasing Power with an Inflationary Budget
The 2023 Budget: The New Masterpiece of Raisi’s Government. According to Iran Gate, Tasnim News Agency has published surprising details about the 2023 budget, claiming that government employees’ salaries will increase by 20%, covering about 40% of the current national inflation.
According to a report published by Tasnim regarding the 2023 budget, the total budget has surpassed 5 quadrillion tomans. Apparently, the government’s public budget share is about 2 quadrillion tomans, and companies have a share of about 3 quadrillion tomans.
Analyzing Tasnim’s Claims
If Tasnim’s claims about the statistics of the upcoming year’s budget are true, it must be said that the thirteenth government has submitted a much larger and more substantial budget to the parliament compared to last year. In other words, the more than 1.4 quadrillion toman increase in the total budget indicates unfavorable conditions and rapid liquidity growth, and if this budget is approved, we should expect further inflation intensification.
Another figure released regarding the 2023 budget is the 20% salary increase for government employees. Of course, this amount must be approved by the parliament, but such a proposal from a government that increased minimum wages by nearly 60% last year is very surprising and unexpected. In reality, the government has been experimenting and, after witnessing the consequences of last year’s incorrect decision, has now made a decision reminiscent of falling off the other side of the roof.
A Salary Increase That Went Too Far
Considering that annual inflation is approaching 50%, the government has decided to increase its employees’ salaries by 20%. Of course, no economist would recommend a 50% salary increase under such conditions, but how they arrived at the 20% figure is questionable since this amount only covers 40% of the annual inflation, which has yet to reflect the inflationary effects of currency price surges.
Taxes and the Government’s Pride in Adding Pressure on People
One of the thirteenth government’s achievements has been the unprecedented collection of taxes from businesses and people throughout 2022. Economists emphasize the need to increase the tax share of government revenues, but almost no economist recommends applying such pressure, especially when industries are shut down and unemployment rates are sky-high. However, due to reduced oil revenues this year and a significant budget deficit, the government has imposed heavy and often unjustified taxes on people.
Now, if Tasnim’s claim is correct, the government intends to consider a revenue of 700 trillion tomans from tax collection for 2023. This amount does not include revenues from customs duties, which apparently will be 120 trillion tomans, totaling 820 trillion tomans.
These figures indicate the government’s determination to increase pressure on businesses and society. In fact, the government intends to transfer the pressure it faces due to increased sanctions and restrictions on oil exports onto the shoulders of people who are actually seeking to establish connections with the world and remove these obstacles. In truth, the government is shifting the cost it should pay for its ideological policies onto the people to at least pay its employees’ salaries.
The Exchange Rate: A Never-Ending Challenge
In the years following the U.S. withdrawal from the JCPOA, setting the exchange rate in the budget has always been a challenge for Hassan Rouhani’s government and now for Ebrahim Raisi’s. In this context, Hassan Rouhani made significant mistakes by setting the 4,200 toman rate for the government dollar, but Raisi criticized this policy multiple times in the 2020 elections and promised to eliminate this rate. However, now leaked budget news suggests a 23,000 toman rate for the government dollar, mainly used for importing essential goods.
This policy, always synonymous with fueling corruption and rent-seeking among influential groups, could lead to a major disaster this time, given the unprecedented increase in the dollar’s price and the 44,000 toman rate in the open market. Recently, Mohammad Reza Farzin, the new Central Bank governor, also made strange statements about stabilizing the exchange rate in the NIMA market.
Now, these statements, along with the leaked budget news for 2023, show that the thirteenth government also intends to follow the exact same pattern of setting the government exchange rate, which will certainly provide a ground for intensifying and strengthening corruption rings in Iran’s economy.
What is more painful is that these actions are carried out under the label of supporting people’s purchasing power, but in the end, not only will purchasing power not be preserved, but in addition to intensifying corruption, the government will be forced to draw on Central Bank resources, which means intensifying inflation and the collapse of ordinary people’s purchasing power.
Another report and analysis titled ‘A Disaster Named the 2023 Budget’ has been published in Iran Gate.