Will Iran cut its energy subsidies?
If the Iranian government reduces its current energy subsidies, it will be a huge remedy for the country's runaway budget deficit. But there will be major political obstacles.
To:
Al-Monitor Pro Members
From:
Dr. Bijan Khajehpour
Managing Partner, Eurasian Nexus Partners, Vienna, Austria
Date:
May 22, 2023
Bottom Line:
Reducing the current energy subsidies is the main remedy for the runaway budget deficit in Iran, but there will be major political obstacles. On the one side, the government is concerned about a new wave of social unrest, and on the other side, Majles deputies will oppose such a move, especially as they will stand for re-election in February 2024. Therefore, the government will be forced to structure, time and justify its decisions in a way that repercussions can be managed.