(MENAFN- Gulf Times) Iranian President Hassan Rouhani submitted a $337bn draft budget to parliament that earmarks about $100bn for public service programmes that would create jobs, address a banking crisis and introduce a new social security programme.
Rouhani told lawmakers that the budget was based on oil prices forecast at $55 a barrel, according to an advance text of the speech, delivered on state TV. He said banks need to 'withdraw from business dealings and return to traditional lending services, and pledged more than $3bn to shore up the sector, which has been beset by bad loans and unauthorised credit lenders.
The draft, which is to be debated, revised and approved by lawmakers, is for the new Iranian year starting March 21. It introduces significant increases to various fees and duties including car registration and the departure tax.
Rounahi said Iran would continue to abide by its nuclear deal with world powers and 'will not be the first to violate the accord, which President Donald Trump refused to certify in October, asking lawmakers to toughen it through legislation. The multiparty agreement, which came into effect early 2016, has helped to bring Iran 'tens of billions of dollars of credit lines from Asian and European banks to Iran, he said.
After struggling for years under sanctions, Iran's economy picked up in 2016 after most restrictions were removed under a deal with world powers on its nuclear programme. Gross domestic product grew 12.5% last year, according to the International Monetary Fund.
But that leap in growth was almost entirely due to a surge in the oil sector as Iran became able to increase its oil exports; the rest of the economy, which is more important to the welfare of most Iranians, improved much less.
The IMF projects growth of just 3.5% this year.
Unemployment, officially put at around 12.5%, is a major cause of public concern and Rouhani said in his speech that 840,000 people would enter the job market next year.
Rouhani is under pressure to boost economic growth and create jobs as his hardline opponents, who were against the nuclear agreement, say he has failed to improve living standards as much as hoped after the lifting of sanctions.
Trump, who has taken a hawkish approach towards Iran, has said Tehran's missile programme should be curbed and wants to punish Iran over its roles in Yemen and Syria. Trump has also dealt a blow to the nuclear deal by disavowing Iran's compliance with its terms, and the US Congress may re-impose sanctions or impose new sanctions. This threat has deterred many foreign banks and companies from doing business with Iran.
As in past years, the draft budget shows spending and revenues in balance, although the actual result will depend on fluctuations in oil prices.
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