DUBAI Iran is to reduce its dependence on oil income and boost non-oil exports in its budget to counter the "heavy" impact of sanctions, President Mahmoud Ahmadinejad said in a television interview late on Saturday.
The budget is due to be presented to parliament on Wednesday for debate and likely amendments before it is subject to a parliamentary vote in the run up to Iran's election in June that will take place against the backdrop of deep economic gloom.
"Events have struck from beyond our own economy and heavy factors are active from outside. If severe fluctuations hit this (oil) income, surely it has an effect," Fars news reported Ahmadinejad as saying, in an apparent reference to sanctions that have nearly halved Iran's oil exports.
"We have to go in a direction to reduce oil receipts in our economy and raise other incomes such as non-oil exports that are increasing rapidly," he said.
Over the past year Iran's economy has borne the brunt of tough sanctions against its oil and banking sectors imposed by the United States and its allies over Tehran's disputed nuclear activities.
The West suspects Iran is trying to develop a nuclear weapons capability. Tehran says its program is peaceful.
The International Energy Agency estimated last week that Iran's oil exports may have dropped below 1 million barrels per day in January from 2.2 million bpd in late 2011, costing the country over $40 billion in reduced revenues last year.
The financial pressures have resulted in soaring inflation and employment, dented production and brought investment to a standstill.
Iran's government has sought to impose cuts to its spending by drastically reducing access by businesses and individuals to its generous foreign exchange sales rates and banned the import of luxury items to stem the flow of hard currency abroad.
Access to hard currency has also been curtailed since major crude oil customer India is no longer been able to pay for nearly half of its shipments in euros because of the sanctions.
But Ahmadinejad said non-oil exports coupled with its technical and engineering services could reach 75 billion dollars in the coming year, a 50 percent rise compared to estimated figures for this year that ends on March 19.
Iranian officials say such exports comprise gas condensate, chemical products, cement, vehicles, agricultural produce as well as nuts and fruit.
As with previous budgets, the process is unlikely to be concluded before the start of the next Persian year, less than a month away, and may drag on for several more months.
It is also likely to be hampered by the deep political divisions between the president and a mainly hostile parliament who accuse him of reckless financial management that they see as the major cause of Iran's economic pain.
(Reporting by Marcus George; Editing by Alison Williams)