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Rouhani takes on privatization in budget

Iranian President Hassan Rouhani, in a departure from the previous administration, has turned in his budget on time and has made conservative decisions in consideration of the difficult economic realities facing Iran.
Iran's President Hassan Rouhani speaks during a session at the annual meeting of the World Economic Forum (WEF) in Davos January 23, 2014.               REUTERS/Denis Balibouse (SWITZERLAND  - Tags: POLITICS BUSINESS HEADSHOT)   - RTX17QZY

On Feb. 10, the Iranian parliament, or Majlis, approved the proposed budget for the year 1393 (March 21, 2014, to March 20, 2015). The numbers are not the most striking aspect of this budget. Rather, it is the punctuality of the administration's handing the budget to the Majlis on time that speaks volumes. This is refreshing and indicates the return of order to the presidential administration, in direct contravention of what happened during the eight-year presidency of Mahmoud Ahmadinejad. 

The 1393 budget was drafted for one of the most complex situations in the 35-year existence of the Islamic Republic. Iran is simultaneously struggling with high inflation (40%) and economic recession (an economic growth rate of minus 5.8% and an unemployment rate that stands at 12.6%), a condition dubbed by economists as stagflation. In 1996, during the presidency of Akbar Hashemi Rafsanjani, inflation reached 49% but economic growth remained at 3%. In 1987, when Mir-Hossein Mousavi was prime minster, economic growth was minus 9%, with the inflation rate at 23%.

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