Iran Economy in Brief – No.96

How does the next year budget bill look like?

On Sunday, Hassan Rouhani presented his proposed budget bill for the following year to the Parliament. The budget had grown by 6.1% compared to the previous year. In the bill for the coming year, Government income has been estimated at 1930 thousand billion IRR ($54.3bn) of which 67% will be acquired via taxes. One of the issues under consideration is the amount of withdrawal from the National Development Fund; a fund which was founded to save some of the oil income for the next generation, now is supposed to spend 30% of its income to finance governmental projects such as paying the retired personnel from the Ministry of Education.

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How much food is wasted in Iran?

Eqtesad Pouya newspaper, quotes the Head of Shiraz Chamber of Commerce, Jamal Razaghi, as saying that Iranian people throw away as much food as 60% of Iran’s oil income or 10 European countries. The largest portion of throwaways is for bread, fruit and vegetables and rice of which 35 million tons valued at 15 billion dollars are thrown away. Mr. Razaghi added that in developed countries waste takes place from the harvest to processing stages. However, in Iran and other developing countries waste takes place mainly during the retail stage and by the consumers. This large amount of waste means that the water used to produce these goods also goes to waste, nearly 9.3 billion square meters which is equal to the water consumption of the entire population as well as industries in Iran.

Pistachio of Rafsanjan or dates of Khuzestan dates?

Ghanoon Newspaper reports the 40% reduction of water in the Karoon River and approval for the Vanak Project. The Vanak Project is set to transfer Karoon river water from its source in Chaharmahal and Bakhtiari over 640 kilometers to pistachio gardens in Rafsanjan.

Shahrvand Newspaper reports that the high salt content in the water of Shayegan Groves has dried one third of the palm trees. Shayegan Groves were responsible for 80% of Khuzestan’s date exports to Russia and Turkey yielding 50 million dollars.

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Social Security Organisation in danger

Ghanoon newspaper published a report by the Research Center of the Iranian Parliament stating the possibility of the Social Security Organisation (SSO) going bankrupt in the next ten years. The center estimated the budget deficit of SSO will reach 1190 trillion IRR by 2025 ($33.5bn). In 2005 the costs of the SSO overtook their monetary sources and the deficit started adding up. The Government currently owes 1200 trillion IRR to the SSO. A short while ago, the Parliament forced the Government to transfer the ownership of a number of its factories to the SSO as collateral for a portion of its debt. Ghanoon added that most of these factories operated at a loss and the transfer only added to the debt of this organisation. The Parliament points to the millions of people covered by the Social Services and warns of a potential national crisis.

Iran Economy in Brief wishes you a very merry Christmas and wonderfully prosperous new year 2018; for you and all your beloved ones.

The next issue of Iran Economy in Brief you will receive on Friday 5 January. To cover the review of all local newspapers as well as providing the latest market results from the Iranian Capital Market starting from January 2018 we will send you the newsletter on Fridays.