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Iran Plans to Grow Its GDP by 8% Through Cutting Oil Output and Focusing on Defense Spending in 2022-2023

Urian B., Tech Times

(Photo : Image from Zbynek Burival on Unsplash) Iran Plans to Grow Its GDP by 8% Through Cutting Oil Output and Focusing on Defense Spending in 2022-2023

Iran is now planning to cut its oil output and put more of its attention towards defence spending in the country’s 2022 to 2023 draft budget. To add, this is mostly because of sanctions and United States-Israeli threats that are linked to its nuclear program.

GDP Growth Projection of 8%

According to the story by TheVibes, Iranian news agencies have reported that the draft, which was just recently revealed to the public, projects a gross domestic product growth or GDP growth of 8%. To add, President Ebrahim Raisi submitted the initial draft to Parliament for a vote which is expected before the start of 2022.

In Iran, however, the New Year starts on March 21 unlike in other countries where the New Year starts on January 1. 

Iran Plans to Produce 1.2 Million Barrels a Day

Iran’s plan is to be able to produce 1.2 million barrels a day at a projected price of $60 a barrel. To expand, this is actually down from its previous 2.3 million barrels per day at the price of $40 a barrel which leaves a revenue of $26.3 billion against the previous budget at $33.5 billion.

Industry experts noted that the estimate is actually too high given that the country is currently selling just around 600,000 barrels per year. With that, oil sales actually account for a quarter of revenues within the budget with yet another 25% from a sharp increase in taxes.

$5 Billion Budget Allocation

The upcoming 2022-2023 budget allocates around $5 billion to boost “defence capacities and strategic research” according to the Tasnim news agency. To expand, this would be up from the $4 billion allocation during the previous year.

Washington has imposed quite stringent sanctions on Tehran while warning of other options in October should diplomacy fail when it comes to the country’s nuclear program. On the other hand, Israel is reserving the right to use force.

Nuclear Deal Between Iran and the World

A nuclear deal between Iran and the world powers was done in 2015 but has been disintegrating ever since the previous President of the United States, Donald Trump, pulled out just three years later.

The accord is made to ensure sanctions relief for Iran in return for tight curbs when it comes to its nuclear program. To add, the previous president decided to re-introduced sanctions which include its oil exports.

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Iran’s Annual Inflation Rate

This prompted Tehran to start disregarding the deal’s limits when it came to nuclear activities in 2019. With that, the current President has mentioned that he wants the US and Iran to return to the agreement. 

As per an article by AsumeTech, Iran has cut their oil production while increasing their defense budgets. 

According to the data from TradingEconomics, Iran’s annual inflation rate declined to 35.7% in November compared to its 39.2% in October. This was actually the lowest reading ever since September of 2020.

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This article is owned by Tech Times

Written by Urian B.

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