Central Bank: 45% growth in government debt; Dejpasand: "We did not borrow a single rial"

While the country's Minister of Economy claimed on Monday, June 7, that the government did not borrow "even a single rial" from the Central Bank last year, the Central Bank of Iran has published a report announcing a significant increase in government borrowing from this bank and other banks in the country.

According to Fars News Agency, Farhad Dejpasand claimed on Monday at a meeting of the Government-Private Sector Dialogue Council, "One of the concerns was that the government would be forced to borrow from the Central Bank to finance itself or increase tax pressure, but given the government's 7-year history, borrowing from the Central Bank was considered a red line; therefore, the government did not borrow even a single rial from the Central Bank last year."

Mr. Dejpasand's statements come at a time when the Central Bank of Iran has simultaneously published a report on the nine-month economic indicators of 2019, and the details of this report show that the government's debt to the Central Bank has increased by nearly 46 percent in the nine months of the last solar year compared to the end of 2019.

Central Bank statistics show that in December last year, the government's debt to the Central Bank reached more than 111 trillion tomans, while this figure was about 76 trillion tomans at the end of 2019.

Detailed statistics from the Central Bank of Iran show that government debt to the bank remained almost constant only in the summer of last year, but it jumped significantly in the spring and autumn. A report on the status of government debt in the winter of last year has not yet been published.

Government debt to the Central Bank was about 27 trillion tomans in 2016, so this figure has almost quadrupled in four years.

Government debt is not limited to the Central Bank. The Central Bank's report shows that government debt to the country's banks has also grown by about 25 percent in the first nine months of 2020 compared to March 2019, reaching 365 trillion tomans.

The report adds that the Iranian government's foreign debt is also about $9.3 billion, of which less than $2 billion is short-term debt and the rest is long-term debt. Iran's foreign debt increased by more than $300 million in the first nine months of last year compared to March last year.

In its latest report published two months ago, the International Monetary Fund says that the Iranian government's net debt (including debt to the Central Bank, banks, companies, foreign debt, etc.) last year was equivalent to 35.7 percent of the country's total GDP; in other words, the total net debt of the Iranian government has reached $227 billion, which has almost doubled compared to 2019.

Source: Radio Farda