Will Iran’s new budget impact its regional influence?

Islam Mohamed

Iran’s President Hassan Rouhani overviewed the country’s new budget on Sunday, raising questions about Tehran’s influence in the region.

Rouhani told parliament that the budget is aimed at easing Iran’s turmoil caused by the US sanctions. Rouhani said the budget of 4,845 trillion rials, or $36 billion at the current street rate, was devised to help Iran’s people overcome difficulty.

He added that the budget would benefit from a $5 billion investment from Russia.

Iran’s economy has been battered, with the International Monetary Fund forecasting it will contract by 9.5% this year, noting that inflation hit 40%.

Commenting on Iran’s new budget, researcher Osama El-Hatimy, an expert on Iranian affairs, said that Iran can export around 800,000 barrels of crude oil per day.

“Despite the US sanctions, Iran exports some of its crude oil,” El-Hatimy told THE REFERENCE.

“Iran’s budget has declined due to falling oil exports since the sanctions were imposed in August 2018,” he said, noting that allocations for Tehran’s arms and militias in the region have been impacted.

“I expect that there will not be a drastic change in Iran’s ties with these militias,” he said, pointing out that these militias are considered to be Tehran’s key sources of power and a means used in its conflict with the West.

The researcher said Iran relies on the informal economy under the supervision of the Iranian Revolutionary Guards. “This informal economy enables Iran’s regime to carry out financial transactions ways from the public and watchdog agencies,” he added.