Iran President unveils budget of 'resistance'

Tehran: Iran's President Hassan Rouhani announced Sunday what he called a "budget of resistance" to counter crippling US sanctions, weeks after a fuel price hike sparked nationwide protests that turned deadly.

Rouhani said the aim was to reduce "hardships" as the Islamic republic has suffered a sharp economic downturn, with a plummeting currency sending inflation skyrocketing and hiking import prices.

The US sanctions imposed in May last year in a bitter dispute centred on Iran's nuclear programme include an embargo on the crucial oil sector whose sales Washington aims to reduce to zero in a campaign of "maximum pressure".

Rouhani told parliament that the budget, which includes a 15 per cent public sector wage hike, "is a budget of resistance and perseverance against sanctions". It would "announce to the world that despite sanctions we will manage the country, especially in terms of oil," he added. Rouhani said the 4,845 trillion rial (USD 36 billion at the current street rate) budget was devised to help Iran's people overcome difficulty.

It would benefit from a USD 5 billion "investment" from Russia which was still being finalised, he said, without giving further details.

"We know that under the situation of sanctions and pressure, people are in hardship. We know people's purchasing power has declined," said Rouhani. "Our exports, our imports, the transfer of money, our foreign exchange encounter a lot of problems. "We all know that we encounter problems in exporting oil. Yet at the same time, we endeavour to reduce the difficulty of people's livelihood." Rouhani said that despite the US sanctions his government estimated that Iran's non-oil economy would "be positive" this year.

"Contrary to what the Americans thought, that with the pressure of sanctions our country's economy would encounter problems, thank God we have chosen the correct path... and we are moving forward," he said. The budget announcement comes after fuel price hikes Iran announced in mid-November triggered deadly demonstrations across the country. Officials in Iran have yet to give an overall death toll for the unrest in which petrol pumps and police stations were torched and shops looted.