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Sehaty Foreign Exchange

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Iran counting on surging oil prices to stabilise economy

NICOSIA, April 26 (AFP) - Iran is counting on resurgent oil prices to make up for last fiscal year's budget shortfall and straighten out its hobbling economy, the specialist Middle East Economic Survey (MEES) said Monday.

"Our budget for (1999-2000) is based on an oil price assumption of 11.80 dollars per barrel," Iranian central bank governor Mohsen Nourbakhsh told MEES.

"With a price of 14 dollars per barrel (its current value), we think we will be able not only to offset the shortage last year but also earn a surplus," he said.

Nourbakhsh pointed out that the budget for the previous fiscal year, which ended last month, was originally based on a price of 16 dollars per barrel. But a slump on the worldwide market drove prices to record lows, leaving Iran with a budget shortfall of some 6.3 billion dollars.

The slump also meant Iran was obliged to reschedule debt, but Nourbakhsh told MEES that Tehran would not have to resort to such a step again.

"The only problem was with the maturity and the structure of the debt and we think we have now passed this critical period of low oil prices," he said.

He added that Iran is still awaiting settlment at the international court at the Hague over its claim that 12 billion dollars in assets remain frozen by the United States after the two nations broke off diplomatic ties in 1980.

"The improved political atmosphere between Iran and the US could play a crucial role in finding a way to settle that dispute.

"But at present we do not see any positive signs from the US with regard to releasing the money, so it has to be settled in the court."


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