The Iranian budget.
Speeches marking the Iranian New Year (Nowruz) on March 21 highlighted disagreements between Supreme Leader Ali Khamenei and President Hassan Rouhani. While both promoted a ‘resistance economy’, each meant something different. The recently published budget for the 2017-18 fiscal year highlights divisions and linkages between the two philosophies.
- Real GDP growth in 2017 will not be much above 3.0% and will rise to 4.5% in the medium term.
- Rising tensions with Washington will further boost defence spending, crowding out development.
- Additional US congressional sanctions, or even threat of sanctions, are likely to depress investor confidence.
- New transport links to Central Asia may significantly increase trade.