Tehran unveils 2004 draft budget

23 December 2003
President Khatami presented the draft budget for the coming financial year, which begins in March 2004, to parliament on 23 December. The draft text forecasts gross domestic product (GDP) growth rate of 7.3 per cent and highlights specific targets needed to reach the ambitious target. Total expenditure is budgeted at $130,000 million, an increase of 10.5 percent on this year. 'We expect to achieve the goals of the third five-year plan [ending in March 2005],' Khatami told parliament. 'Counting on annual growth of 6.7 percent over the [first] five years of the plan, we have to have a minimum economic growth of 7.3 percent in 1383 (March 2004-March 2005).'

The draft text says that reducing unemployment and increasing non-oil exports are key target areas. National unemployment officially stands at 12.8 per cent, but is thought to be significantly higher. The budget predicts that about 754,000 people will enter the job market in the new financial year, compared to 653,000 this year. He said that the government would follow its policy of privatisation and encouraging foreign direct investment. Non-oil exports are forecast to rise $7,700 million - a 20 per cent increase. The government also aims 'to decrease the current inflation level of 16.6 per cent to less than 15 per cent,' he said.

Despite moves to liberalise Iran's economy in the coming year, the government will continue to subsidise basic goods and services to the tune of $4,700 million, a rise of 9.4 per cent from this year.

Local press reported that the government has based its predictions on a conservative oil price of $19.5.

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