Rouhani Aide: Inflation will not be Contained Even in Four Years

Roozonline - Since last week’s nuclear agreement in Geneva hopes in Iran for the easing of economic pressure on the Iranian people have risen but a senior aide to President Hassan Rouhani dispelled such optimism and said that inflation could not be fully tackled in the next four years.

This pessimism was aired even as media outlets close to Rouhani’s administration had been boasting of a minor reduction in inflation figures in the first 100 days of the new presidency.

According to Iran’s ISNA student news agency, Rouhani advisor Akbar Torkan referred to the economic situation in the country and said, “Some experts believe that today inflation is falling in the economy. Economic recession is the result of the international sanctions while inflation is caused by mismanagement. We are still in the first phases of lifting the sanctions. The first step was to prevent new sanctions and some will be lifted. But other measures must be taken to attain the final goal. Inflation must be tackled with thought. Recession will be lifted because of the current agreement but reducing inflation is a lengthy journey.”

“Inflation cannot be eliminated in a four year period and requires more time. It is possible that by the end of Mr. Rouhani’s term the inflation rate may fall to a single digit number but I doubt that in the next four years the 40 percent inflation rate will fall to less than 10 percent. Even if prices remain unchanged, inflation will not fall to zero. This is because of the existence of systemic inflation which will not be eliminated, even though Mr. Zarif’s efforts can reduce it,” Torkan continued.

Recently after Iran’s media reported the country to be suffering from an inflation rate of 42 percent, Iran’s Central Bank responded by announcing that general inflation for families had risen by 36.6 percent over the last 12 months, and requested the media to be more cautious about its economic news. The head of Iran’s Statistical Center Azar Adel told the Central News Unit that if calculated point by point, the country’s rate of inflation was falling, while it had reached the levels of 36 percent in t he cities and 40 in the provinces.

Gholamreza Kateb, a pro-administration Majlis representative recently claimed that the fall in the inflation in the country in the first 100 days of Rouhani’s presidency was because of the government’s policies. He said that the liquidity stood at 18 percent when Rouhani came to office but that it had fallen to 11 percent and in some cases to 7 percent.

Kateb’s remarks conflicted with what the spokesman for Rouhani’s administration had said last week to the effect that under the current conditions inflation in the last 12 months was high and that it would probably continue to rise but he added that with the changes that were planned to be made to the annual budget the figures would drop to under 30 percent.

According to IMF, Iran has the highest inflation rate among the oil exporting countries of the region which it says stands at 30.5 percent in 2012 rising to 42.3 percent this year. It predicts it would fall to 29 percent in 2014, which is recognized to be a very high figure.

by Firoozeh Matin