Iran introduces $39 billion 'budget of resistance' to counter US sanctions

Iran's President Hassan Rouhani on Sunday introduced a "budget of resistance" worth USD 39 billion to counter the crippling sanctions imposed by the United States, weeks after a fuel price hike that sparked deadly protests across the Middle East country.

Rouhani said that the aim of the budget was to reduce "hardships" as the Islamic Republic was suffering a sharp economic downturn with a plummeting currency sending inflation above 40 per cent and hiking import prices, Al Jazeera reported.

In May last year, the Trump administration had imposed sanctions on Iran's nuclear programme as well as the oil sector. Washington further aimed at reducing sales of Iranian oil to zero in a "maximum pressure" campaign following the sanctions.

Rouhani told parliament the budget, which includes a 15 per cent public sector wage hike, "is a budget of resistance and perseverance against sanctions."

It would "announce to the world that despite sanctions we will manage the country, especially in terms of oil", he added.

The President also said that the 4,845 trillion rial ($39bn) budget was devised to help Iran's people overcome economic difficulties.

The draft budget has been made for the financial year starting in late March 2020 that will be voted on by the Iranian parliament.

The budget announcement comes ahead of the country's parliamentary elections in February and after fuel price hikes Iran announced in mid-November triggered deadly demonstrations across the country.

The budget forecasts oil revenues falling 40 per cent, leaving a gap it plans to plug using state bonds and selling state properties.

"We know that under the situation of sanctions and pressure, people are in hardship. We know people's purchasing power has declined," the President was further quoted as saying.

Despite the US sanctions Tehran estimated that Iran's non-oil economy would "be positive" this year, Rouhani stressed further.

The International Monetary Fund has, however, foretold that 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 per cent of the gross domestic product in 2019-20 and 5.1 per cent in 2020-21.