Iran’s President Hassan Rouhani announced Sunday what he called a “budget of resistance” to counter crippling US sanctions, weeks after a fuel price hike sparked nationwide protests that turned deadly.
Rouhani said the aim was to reduce “hardships” as the Islamic republic has suffered a sharp economic downturn, with a plummeting currency sending inflation skyrocketing and hiking import prices.
The US sanctions imposed in May last year in a bitter dispute centred on Iran’s nuclear programme include an embargo on the crucial oil sector whose sales Washington aims to reduce to zero in a campaign of “maximum pressure”.
It would “announce to the world that despite sanctions we will manage the country, especially in terms of oil,” he added.
Rouhani said the 4,845 trillion rial ($36 billion at the current street rate) budget was devised to help Iran’s people overcome difficulty.
It would benefit from a $5 billion “investment” from Russia which was still being finalised, he said, without giving further details.
“We know that under the situation of sanctions and pressure, people are in hardship. We know people’s purchasing power has declined,” said Rouhani.
“Our exports, our imports, the transfer of money, our foreign exchange encounter a lot of problems.
“We all know that we encounter problems in exporting oil. Yet at the same time, we endeavour to reduce the difficulty of people’s livelihood.”
Rouhani said that despite the US sanctions his government estimated that Iran’s non-oil economy would “be positive” this year.
“Contrary to what the Americans thought, that with the pressure of sanctions our country’s economy would encounter problems, thank God we have chosen the correct path… and we are moving forward,” he said.
The budget announcement comes after fuel price hikes Iran announced in mid-November triggered deadly demonstrations across the country.
Officials in Iran have yet to give an overall death toll for the unrest in which petrol pumps and police stations were torched and shops looted.
London-based human rights group Amnesty International said at least 208 people were killed in the crackdown, but Iran has dismissed such figures as “utter lies”.
– ‘Reducing hardships’ –
US President Donald Trump began imposing punitive measures in May 2018, after unilaterally withdrawing from an accord that gave Iran relief from sanctions in return for limits on its nuclear programme.
The United States has continued to ramp up its sanctions this year as part of a stated campaign of “maximum pressure” against the Islamic republic.
Iran’s economy has been battered, with the International Monetary Fund forecasting it will contract by 9.5 percent this year.
The sharp downturn has seen the rial plummet and inflation running at more than 40 percent.
In his speech, Rouhani only touched on a few areas of the draft budget for the financial year starting late March 2020, which must be scrutinised and voted on by parliament.
“All our efforts are geared towards reducing these hardships to some extent so it can be more tolerable,” he told deputies.
“I deem it necessary here to tell the honourable representatives that the criteria of our budget is still based on maximum pressure and continuation of America’s sanctions,” he said.
“This does not mean that the government will not take other steps, but at the same time this is our criteria and based on this criteria we have devised and executed the budget.”
The budget comes ahead of parliamentary elections in February.