The government of Iran on Sunday revised and approved its annual budget taking into consideration the rise of oil prices that have appeared to mitigate the impact of US-led sanctions on its economy.
The Islamic Republic’s elite Guardian Council gave its approval to the budget for Iran’s fiscal year to March 2013 at 5,560,000 billion rials ($453 billion at the official rate), the official IRNA news agency reported.
Embattled Iranian President Mahmoud Ahmadinejad presented his government’s 5,100,000 billion rials ($410 billion) annual budget to the parliament in February.
Iran, OPEC’s second-biggest producer, benefited from high crude prices during the first quarter of 2012 that reached historic heights due to US-led embargo on the country’s oil industry.
The budget, however, remains lower than that of the 2011-12 fiscal year, which was set at $484 billion.
The official exchange rate is set at 12,660 rials against the dollar, in stark contrast with the free market where it fluctuates between 16,000 and 18,000 to the greenback.
The government’s budget is set at $113 billion, which counts for only a small percentage of the national budget, mostly represented by the state sector of the economy, including banks, industries and semi-governmental bodies.
Iran has allocated $49 billion of oil revenues to the government’s budget, with the forecast price of $85 a barrel, up from $81 last year.
Tehran says it has built up large reserves of gold and foreign currencies to withstand the economic embargo imposed by the West over its disputed nuclear programme.
Experts say the sanctions have led to higher import prices, increased inflation, lower foreign investment and difficulties in repatriating currency, in particular in the oil sector.
The EU’s round of sanctions on Iran’s oil sector will come into effect on 1 July.