Iran's President Rouhani said that the U.S. sanctions will bring problems but will not bring the government to its knees.
Iran’s President Hassan Rouhani Tuesday presented a US$47 billion state budget, about a third of it consisting of subsidies for low-income groups. He said that the United States sanctions would affect people’s lives and economic growth but not bring the government to its knees.
U.S. President Donald Trump pulled the United States out of a multilateral nuclear deal with Iran in May and reimposed sanctions on it, including on its vital oil industry.
“America’s goal is to bring Iran’s Islamic system to its knees ... and it will fail in this, but sanctions will no doubt affect people’s lives, and the country’s development and economic growth,” Rouhani told parliament in a speech carried live on state television.
Rouhani said state employees would get a 20 percent pay raise next year, and the budget included US$14 billion in subsidies to provide cheap basic goods such as food and medicine, up from US$13 billion in this year’s state budget.
Officials have said the budget is designed to provide for the basic needs of low-income groups, including state employees and pensioners, support production and employment; and seeks to relaunch thousands of stalled state projects with the help of private investors.
Rouhani called for trimming the state sector and curbing the government’s dependence on oil income, which is forecast at 1,425 trillion rials (around US$3 trillion) in the proposed budget.
“If the private sector was active in the country ... and if the budget did not rely heavily on oil, the impact of sanctions would have been much less,” Rouhani said.
A separate draft budget for state companies, institutions and banks allocate them a total of US$127 billion.