MEK: Iran Without Basic Commodities
The National Council of Resistance of Iran (NCRI), and the People’s Mujahedin of Iran (PMOI / MEK Iran), reported that the budget deficit and the problem of supplying basic products appear to be the most pressing economic challenges facing the Iranian government. Raisi’s government and economic indicators demonstrate the difficult circumstances that the new government will face when its finally installed in the coming days.
The budget for 2021 has been finalized
The government’s general budget for 2021 has been finalized, with resources and expenditures totaling 1,370 trillion Tomans.
In this regard, the government’s budget performance in the first four months of this year, while not released publicly, the news and certain numbers suggest that the aforementioned figures were only reached to a minor extent, which is insignificant and will solve nothing.
Government debt has been moved to social security
Although 100 trillion tomans of government debt have been moved to social security in the form of debt relief in recent weeks, the likelihood of further transfers, particularly through the stock exchange, remains problematic due to rather fragile conditions. There have only been a transfer of 100 trillion tomans, and no other large amount can be moved.
According to Central Bank figures, bond sales totaled only 4.9 trillion tomans by the end of July. If this trend continues, and a total of more than 15 trillion tomans in bond sales is not accomplished by the end of the year, the government will conclude the year with a deficit of 117 trillion tomans.
The cost-cutting dilemma
Meanwhile, the outgoing government has begun the budget’s definite expenses, such as raising employee and retiree salaries, equalizing their salaries, and taking other measures, such as increasing job and managerial extras for certain groups, all of which will result in the realization of 100% of current expenses.
The cost-cutting dilemma has social and welfare consequences for wage earners, and if it is not addressed, it will result in budget deficits and rising inflation.
The shortage of basic commodities
The shortage of basic commodities experienced by the 13th government comes at a time when basic food items are already in limited supply.
Iran is among the top ten countries in the world in the production of several basic foods like chicken, but it lacks self-sufficiency in the production of inputs, and this has become the most important issue in terms of food security.
Unprecedented water shortage
The Ministry of Agriculture Jihad reported on July 14 that the increase in world prices of imported inputs and other expenditure items in the new year, combined with the country’s unprecedented water shortage, general price inflation, and a significant increase in grain crops prices compared to the previous year, have pushed up the cost of livestock production dramatically.
Farmers have been driven to slaughter their livestock
Farmers have been driven to slaughter their livestock, including their productive cattle, as a result of this, in combination with misleading and supposedly consumer-friendly regulations.
The Ministry of Agriculture Jihad has warned that the elimination of productive livestock, in addition to the loss of capital and genetic resources of the country’s livestock, will soon lead to decreased milk and meat production, as well as a drastic reduction in total livestock population.
In the medium term, however, given the 3.5 to 4-year generation gap, there will be no way to compensate for the decreasing livestock population, placing the country at risk of milk and meat scarcity.