Tehran, Dec 29, IRNA -- Deputy Director of Management and Planning Organization (MPO) for Economic Affairs Hamid Reza Baradaran-Shoraka said here Sunday that the nation's current revenues are not adequate for the country's socio-economic development requirements and foreign loans are needed.

He told reporters that the 1382 (starts March 21) budget provisions over dlrs two billion of loans is to be earmarked for infrastructural development, including in oil and water sectors as well as industrial renovation and road construction.

"Foreign loans have no economic justification when they are used for current expenditures," he said.

The uses of foreign loans are explicitly enunciated in the budget bill as the issuance of bonds by government-affiliated organs.

On using the surplus hard currency exchange fund, he added "all of the fund's reserve of hard currency allotted to the state sector has already been withdrawn."

On the oil revenues next year budget, he added that the Third Five-Year Development Plan (March 2000-March 2005) stipulates for the government to use over dlrs 11.58 billion of hard currency, but, the budget bill forecasts dlrs 15.3 billion as the hard currency needs of the country.

To provide the hard currency figure, the government is tabling a bill to the Majlis which, "if passed authorizes the government to use 15.3 percent of the oil revenues."

He said the MPO forecasts the next year's economic gross in the range of between 5.5 percent to 6.5 percent.

He said subsidies have been set at rls 14,447 billion in the budget bill which is 12 percent higher than the figure this year.

The real growth in budget does not exceed five percent, with the current expenditures set at 8.6 percent and the growth the development udget forecasted at 9.5 percent.

Meanwhile, Head of Management and Planning Organization (MPO) Mohammad Sattarifar said last week that the 1382 budget will be contractionary in current expenditures and expansionary in development sector.

Speaking to reporters, he said the current general budget has had a 17 percent rise compared to the predicted figures. The current budget has risen by 14 percent and development budget 24 percent this year.

On the other hand, the next year budget will be eight percent higher over the 1381 budget - development and current expenditures will be 8.6 percent and 3.5 percent higher, respectively.

Sattarifar stated the government faces a rls 20,000 billion of unrealized revenues which it compensated by cutting rls 12 billion from development budget - comparable to 22 percent cut in development credit - and eight billion from the current budget.

The MPO head said the budgetary allocations will rise for the health, education and higher education affairs next year.

He said over rls 4500 billion will be earmarked for creating jobs to be distributed among the provinces based on their needs.

The minimum economic growth for next year is predicted at 6.1 percent," estimated to create 550,000 employment opportunities," he noted.

The nation needs one million jobs which calls for additional resources, including dipping into the hard currency reserve fund and channeling credit to the private sector.

On borrowing from external sources of finance, MPO head said the 1382 budget authorizes borrowing over dlrs two billion to be directed to incomplete development projects as well as creating new production capacities in the economy.

"Mobilization of domestic resources is inadequate in tackling the problems of the nations and there should be garnering of resources from abroad," he remarked.

On the foreign exchange rate, he added the rate is not determined by the individuals and rather is set by such economic variables as economic growth, productivity, inflation and employment rates. "The current foreign exchange rate is acceptable for next year," the MPO head stated.

Sattarifar said that the budget has set ceiling of dlrs 15.3 billion of hard currency earnings which has to be generated through selling oil and drawing on the hard currency reserve fund.