Rising Expenditures Outpaces Oil Revenue Growth

January 2007 | Economic Analysis

Having promised to share the oil wealth with the masses, President Mahmoud Ahmadinejad has embarked on a spending spree that has not only stoked already high levels of inflation, but also led to a widening budget deficit. It is indeed almost ironic that having had relatively small and manageable budget deficits throughout a period of low crude prices, Iran has managed to fall so deeply into negative territory at a time of historically high oil prices. What is worst is that while the reliance on oil as a source of funding appears to have increased - central bank statistics suggest

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