Despite repeated optimistic forecasts about the economy, the Iranian government has failed to balance the budget and says it is facing a shortage of funds to pay the salaries of public employees.

Mosalreza Servati

Mosalreza Servati

Mosalreza Servati, a member of Parliament’s planning and budget commission, reported on Wednesday December 30: “In recent months, the salaries of government employees have not been paid on time and there is concern that the same trend will prevail in the next three months.”

The Tasnim News Agency reports that according to Servati, a number of development projects approved by the government have not received the funds to get started.

He explained that only 70 percent of expected tax revenues has so far been collected, adding that the anticipated oil revenues have been correct.

There have been some contradictory reports about the effect of falling oil prices on the government budget. While the spokesman for the government announced earlier that the government is able to run the administration on revenue from oil selling at 40 dollars per barrel, the vice president has been quoted as saying that they had not prepared for oil prices below 60 dollars a barrel.

Another problem the government has faced is the payment of monthly benefits set up during the former administration as a means of cushioning households from the scrapping of government subsidies for energy and food staples. Servati said the government does not dare cut off the benefits being paid to about three million recipients who are in fact ineligible to receive them due to high incomes.

Reports indicate the government will have a budget shortfall of 51 trillion toumans at the end of the Iranian calendar year in March.