Iran's President Concedes Economy Hurting Over Oil

Ahmadinejad did not elaborate on which public sector projects would have to be shelved.

Independent economic analyst Saeed Leilaz said most of them would likely be public utility projects while oil and gas exploration projects could be delayed.

Another possibility is to cut subsidies that keep automobile fuel prices low but drain the country of hard currency. Because it has few domestic refineries, Iran must import some $350 million worth of fuel per month.

"To manage the country in a better way, applying taxes to low-priced energy is the best" solution, Ahmadinejad said.

But the government's imposition of limited fuel rationing in 2007 proved wildly unpopular. Many economists believe cutting fuel subsidies will shoot Iran's inflation up to more than 50 percent.

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