Central Bank: 45% Growth in Government Debt; Dezpesand: “We Did Not Borrow Even One Rial”
While Iran’s Economy Minister claimed on Monday, June 7, that the government did not borrow “even one rial” from the Central Bank last year, the Central Bank of Iran has released a report showing a significant surge in government borrowing from the Central Bank and other domestic banks.
According to Fars News Agency, Farhad Dezpesand stated on Monday in a session of the government-private sector dialogue council: “One of our concerns was that the government might be forced to borrow from the Central Bank for financing or increase tax pressure, but given the government’s seven-year track record, borrowing from the Central Bank was considered a red line; therefore, the government did not borrow even one rial from the Central Bank last year.”
Dezpesand’s remarks came as the Central Bank of Iran simultaneously released its nine-month economic indicators report for 1399, which shows that government debt to the Central Bank increased by nearly 46 percent in the nine months of the previous solar year compared to the end of 1398.
Central Bank statistics show that by the end of Azar (December) of last year, government debt to the Central Bank reached over 111 trillion tomans, whereas this figure was around 76 trillion tomans at the end of 1398.
Details from the Central Bank of Iran’s statistics show that government debt to the bank remained relatively stable only during the summer quarter of last year, but saw significant jumps in the spring and fall quarters. No report has yet been released on the status of government debts during the winter quarter of last year.
Government debt to the Central Bank in 1395 was around 27 trillion tomans; accordingly, this figure has quadrupled over four years.
Government debt is not limited to the Central Bank alone. The Central Bank’s report shows that government debt to domestic banks also grew by approximately 25 percent in the first nine months of 1399 compared to Esfand 1398, reaching 365 trillion tomans.
The report adds that Iran’s foreign debt is approximately 9.3 billion dollars, of which less than 2 billion dollars is short-term debt and the rest is long-term debt. Iran’s foreign debt increased by over 300 million dollars in the first nine months of last year compared to Esfand of the previous year.
The International Monetary Fund, in a report released two months ago, states that Iran’s net government debt (including debt to the Central Bank, banks, companies, foreign debt, etc.) last year amounted to 35.7 percent of the country’s total gross domestic product; in other words, Iran’s total net government debt reached 227 billion dollars, which doubled compared to 1398.
Source: Radio Farda
