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IMF forecasts fiscal deficit in Iran


Press TV - The International Monetary Fund has predicted that Iran will face a fiscal deficit should crude oil prices fall below $90 per barrel.

"Iran's break-even price is $90 a barrel, and that is a big issue in Iran right now," Mohsin Khan, Middle East and central Asia director at the IMF, told Dow Jones Newswires.

"If prices dip below $90 a barrel, and we have seen it touch $89 earlier this week, then they would have to tighten their public expenditure policy, and probably cut subsidies, which would be an issue for the government there - the public would not be content," he added.

The weakening of the global economy and a fall in oil demand has already brought prices down from a record high of over $147 a barrel on July 11. The recent turmoil in Wall Street markets accelerated the fall in oil prices.

Khan forecast a break-even price of $56 per barrel for Algeria while the figure stood at $49 for Saudi Arabia, $33 for Qatar and $23 for the UAE.

Iraq is the only country in the region which is faced with a fiscal deficit with the current oil price standing, according to IMF figures, to be published in the Fund's next regional outlook for the Middle East and Central Asia.

Some analysts have criticized President Mahmoud Ahmadinejad's government for over dependence on oil revenues which has led to rising inflation in OPEC's second largest oil exporter.

All six countries mentioned in the IMF report are members of the Organization of Petroleum Exporting Countries (OPEC), which pumps about 40 percent of the world's oil.

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