Iranian President Rouhani presents 2019 budget to parliament as US sanctions take effect
Today, President Hassan Rouhani will formally submit to parliament the budget for the next Iranian calendar year, which begins on March 21, 2019.
After harsher American sanctions were imposed in November, the Islamic Republic’s 2019-2020 budget predicts a drop in oil exports, from 2.7 million barrels per day (bpd) to 1.5 million bpd. Many expect that the latter estimate is overinflated, and that the real figure could be as low as 500 thousand bpd.
Washington’s goal with the implementation of these measures is not to push the Iranian economy to the point of collapse, which would cause global oil prices to skyrocket, hurting the American economy. Instead, the Trump administration intends to keep Iran in crisis to force concessions on key issues, like the continued development of its missile program. As such, 180-day oil import exemptions have been granted to key Iranian trading partners, like India and China.
Even after the exemptions expire, China and India are unlikely to cease imports of Iranian oil, which are necessary for their immense energy requirements. Regardless, due to American sanctions, expect economic contraction–somewhere in the ballpark of three to four percent– and a further depreciation of the rial to hamstring the Iranian economy in the upcoming fiscal year.
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