Unfavourable Fiscal Outlook

October 2008 | Economic Analysis

The central government will continue to pursue an expansionist fiscal policy over the forecast period, running up large deficits which, for now, will be financed using the Oil Stabilisation Fund. Although the fund's assets are kept secret, we do not think the current levels of net outflows are sustainable in the long run and Tehran could be forced to issue debt in order to finance itself, or to cut down on expenditure.

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