İrem UZUN -TDO- Iran's President Hassan Rouhani announced what he called a $39bn "budget of resistance" to counter U.S. sanctions following a fuel price rise that sparked deadly nationwide protests. Iran will benefit from a $5bn "investment" from Russia that was still being finalized, he said, without giving further details.
In the opening session of the Parliament, Rouhani told “Next year, similar to the current year, our budget is a budget of resistance and perseverance against sanctions. This budget sends a message to the world that despite sanctions we will manage the country, especially in terms of oil... The budget will counter maximum pressure and sanctions by the US”. The budget for the financial year starting late March 2020 comes after fuel price hikes that were imposed in mid-November triggered deadly demonstrations across Iran. In his speech, Rouhani also announced a 15% increase for public sector wages in a country.
The budget is set to be about $40bn, some 10% higher than in 2019. The increase comes as the country is suffering from a 40% inflation rate. The United States sanctions imposed in May last year in a dispute centered on Iran's nuclear program include an embargo on the crucial oil sector. Washington aims to reduce sales to zero in a campaign of "maximum pressure". The International Monetary Fund has said Iran would need an oil price of $194.6 a barrel to balance its budget in 2020-21 and forecast a fiscal deficit of 4.5% of gross domestic product in 2019-20 and 5.1% in 2020-21. Analysts have said Iran had probably been forced to sell its crude at a discounted rate, as it seeks to entice buyers wary of violating U.S. sanctions.