The figure is apart from the 380 trillion rials originally approved by Majlis in January when debating the budget bill, Fars News Agency reported.
As per a government directive sent to the Ministry of Economy and the Plan and Budget Organization, the former is in charge of selling bonds and the PBO is tasked with allocating budgetary credits for reimbursing the principal and interest of the securities in the next budget.
The move was approved in July by the Supreme Council of Economic Coordination -- an ad hoc economic decision-making body comprising the three branches of power -- as part of a package to plug the deficit holes, according to Financial Tribune.
The general revenues in the budget are forecast at 4,480 trillion rials ($39 billion), which is 5% higher compared to last year’s budget.
Under Pressure
The government originally predicted oil revenues to be in the region of 1,370 trillion rials ($12 billion) in the current year, which accounts for 36% of the government’s total revenue. The figure, ironically, indicates higher dependence on oil compared to the previous budget.
With new US sanctions taking a toll on the key oil sector, the government is under pressure to find alternatives to compensate the diminishing oil export revenue.
With the declared intention of crippling Iran’s economy, US President Donald in May 2018 abandoned the nuclear deal Iran had signed with the six world powers in 2015 and announced tougher sanctions against Tehran.
In his own words, he imposed the "toughest ever" sanctions on Iran’s oil exports last November. Fearing further increase in global crude oil prices and supply shortages, Trump granted sanction waivers for six months to eight main countries buying Iranian oil.
Exporting oil in the international market became more difficult for Iran after the United States refused to extend the waivers.
Structural Reforms
The government’s original oil income forecast was based on exporting 1.5 million barrels/day. This figure was cut to 300,000 bpd after the budget went through structural reforms in spring to be compatible with new conditions, namely declining oil earnings.
Local reports say the budget deficit is projected between 1,000 trillion and 1,500 trillion rials ($8.4b-$12.6b) this year and is to be partly fixed by cuts in general expenses and partly by new measures to generate revenues.
The top council in July okayed four methods to generate 970 trillion rials in revenues, namely by divesting surplus properties, withdrawals from the foreign exchange reserve, borrowing from the National Development Fund of Iran- the sovereign wealth fund - and selling Islamic financial securities.
Accordingly, the council allowed the government to withdraw 450 trillion rials ($3.9 billion) from the NDFI and 45 trillion rials from the foreign currency reserves.
In addition, the government was mandated with issuing 380 trillion rials worth of bonds -- above the amount mentioned in the annual budget.
On behalf of the government, the Ministry of Economy was allowed to generate 100 trillion rials ($877 million) in revenues by divestiture of state-owned assets.