Iran plans to slash inflation to one-digit rate

A view of Tajrish traditional Bazaar in northern Tehran (file photo)

The Iranian minister of economic affairs and finance says the Islamic Republic is determined to reduce the existing high inflation rate to a one-digit level.

On Saturday, Ali Tayyebnia pointed to Tehran’s new package for ending the state of stagflation in the country, saying that the administration of President Hassan Rouhani will continue curbing the inflation to a point “where we can witness a one-digit rate.”

Stagflation is a situation where the inflation rate is high and the economic growth rate slows down.

Tayyebnia noted that the package for curbing the stagflation is a comprehensive plan that incorporates a series of fiscal, commercial, forex and budget policies.

The Iranian economy minister also pointed to the administration’s reform plan for the country’s tax system in an attempt to minimize its subsequent negative effects on economy.

Iran’s inflation rate dropped to 26.2 percent in the Persian calendar month of Khordad (ended 21 June) following Tehran’s new economic policies.

The continuing fall in the inflation rate started in November 2013, two months after Rouhani warned that the Iranian economy was in a state of stagflation.

Critics, however, oppose President Rouhani’s economic policies, saying his administration has failed to prevent the rising prices of commodities, particularly fuel, and encourage consumer spending.

The Rouhani administration has envisaged a 25-percent inflation rate for the current Persian calendar year (ending March 2015).

Analysts believe that a rise in production of goods and services has reduced liquidity and led to the fall in the inflation rate.

By Press TV

 

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