Iran MPs warn president over recession

As many as 100 lawmakers have written to President Hassan Rouhani to put him on notice over lingering recession which is threatening to put a new fleet of Iranians out of work.

“This deep and unprecedented recession in the country’s economy has led to the closure of most economic sectors, with the only solution being a practical measure by the government to implement the ‘economy of resistance’,” they said.

The economy of resistance has been proposed by Leader of the Islamic Revolution Ayatollah Seyyed Ali Khamenei to establish a knowledge-based economy relying on domestic capacities and cut dependence on oil revenues.

The government’s budget is under strain amid sanctions and low oil prices. On Tuesday, Government spokesman Mohammad Baqer Nobakht said the state budget for next fiscal year is 2.6% leaner than the current year which ends in March 2016.

Cited by the IRNA news agency, Nobakht said the new budget has been tentatively set at 2,670 trillion rials ($89.1 billion) based on an official exchange rate of 29,970 rials to the dollar.

In this file photo, President Hassan Rouhani talks with lawmakers in a parliament session.

Oil revenues were estimated at $22 billion, according to IRNA.

On Monday, the International Monetary Fund said Iran is expected to run a budget deficit of 2.2% of gross domestic product this year.

Iran’s economy will continue to suffer until sanctions are lifted and the country is able to significantly lift oil exports, with real growth estimated at near zero (-0.5 to +0.5) for 2015-16, it said.

The IMF urged Iran to keep inflation under 10% through a prudent monetary and fiscal policy as it praised the Iranian government for its bid to unify the foreign exchange market.

In October, four members of Rouhani’s own cabinet wrote him to warn that without immediate action, the “recession will transform into a serious economic crisis”.

Nobakht said the government saw inflation falling below 11% in the coming year and economic growth reaching five to six percent.

Leading economist Masoud Nili said the much-anticipated lifting of sanctions will boost Iran’s foreign exchange reserves in the short-term, providing a temporary stimulus.

“But for the stimulus to continue and translate into growth, there is need for economic reforms,” he told Mashreq News, advising Iranians to temper down their expectations from the lifting of sanctions.

By Press TV