Iran MPS Move to Boost Spending after Oil Windfall
TEHRAN, Oct 4 (Reuters) - Iran's parliament gave initial approval on
Wednesday to a government plan to use up to $4 billion in extra oil income
until March to help revive the stagnant economy.
State radio said deputies passed after a first reading a budget amendment
allowing the government to spend half of Iran's extra income from robust
oil prices to fund development projects and create jobs.
The measure, which still has to be passed after a second reading and
approved by a top state body, would allow the extra spending to start at
once and continue in the Iranian year to March 2001.
Without the amendment the government would not have access to the the
extra oil income -- estimated by officials at up to $8 billion in the current
year -- until the next year beginning in March 2001.
State radio said the measure allowed the government to use the extra
funds to boost production and employment in industry, mines, agriculture
and transport and in projects to offer technical and engineering services
to the private sector.
Iran's Central Bank governor expressed hope last week that the extra
oil income could help boost investment and growth and reduce unemployment,
which official figures put at 16 percent.
As international oil prices hover at 10-year highs of over $30 per
barrel, Iran's crude oil exports of some 2.4 million barrels per day have
been fetching around $26 a barrel -- well above the forecast $15.80 per
barrel.
Some Iranian economists have cautioned that a big cash infusion could
feed inflation and said structural reforms were needed for a sustainable
economic recovery.
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