||The importance of mobilizing the existing savings in the national economy, to the investment for the development, is an issue on which all economists. unanimously agree. Therefore, finding out the dynamic forces of the private sector’s savings behavior the can be a solution for the policy markers for mobilizing this important economic factor. The goal of this dissertation is to study the effect of the government budget deficit on the savings in the Iran private sector during the first and second economic development programs and to present its outlook in the third economic development program. Along the goal of this research, the following hypotheses have been examined for the economy of Iran:
1. The private sector’s saving resources have been affected by the budget deficit.
2. The main resources utilized by the government, for the provision of the budget deficit, have caused the decrease in the private sector’s savings. The statistical population used in this research included: The macro statistics of the government budget deficit, government expenses, government incomes, liquidity, inflation rate and the Gross National Products (GNP) during the period of the study. In this dissertation, by using the simultaneous models, the effect of the government budget deficit on the private sector’s savings was examined. The results of this research indicate that during most of the years of study, hard reliance of the government on the banking system for the provision of the budget deficit, has caused a decrease in the private sector’s savings, thus justifying the hypotheses of the research. This is due to the fact that provision of the budget deficit through borrowing from the banking system, firstly caused an increase in the public sector’s debts to the Central Bank and then due to the growth in the monetary base, the growth of liquidity and the increase of the inflation rate, the decrease in the savings is caused. However, the outlook of the private sector’s savings in the third economic development program, due to the decrease of inflation rate and the increase of GNP, is noticed positive. Therefore, borrowing from the Central Bank is realized an inappropriate method for the provision of the government budget deficit, because it causes the increase in the inflation rate and has a negative effect on the savings, investment and production. So, it is necessary, in the area of the economic policy making, fiscal policy is used for the economic growth in order to increase the savings in the society.