Business | Economy
Iran says it can curb but not tame inflation
Iran's new economy minister on Tuesday said inflation, which has rocketed up and prompted public criticism of the government, could be curbed but not completely tamed in a year.
- Reuters
- Published: 23:23 August 5, 2008
Tehran: Iran's new economy minister on Tuesday said inflation, which has rocketed up and prompted public criticism of the government, could be curbed but not completely tamed in a year.
Shamseddin Hosseini was speaking to parliament just before lawmakers voted to back his appointment. His predecessor, Davoud Danesh Jafari, left the cabinet in April with a parting shot at government policies that he blamed for stoking price rises.
"I believe that inflation is not a problem that can be solved in one year. But with good planning the flames of inflation can certainly be reduced in a few months," Hosseini told parliament in an address carried live on state radio.
"Despite the many problems that exist, the capacities and capabilities of the country is such that we can solve all those problems hand-in-hand," Hosseini said.
Inflation, now around 26 per cent, has climbed steadily from around 11 per cent since President Mahmoud Ahmadinejad took office in 2005 with a pledge to share out Iran's oil wealth more fairly.
Economists and Ahmadi-nejad's critics say the government's profligate spending of windfall revenues from crude exports is the main culprit. Other big oil producers in Gulf states also face rising inflation, but don't match Iran's levels.
Price rises are a major gripe for Iranians and the economy is likely to be a key battleground for Ahmadinejad if, as expected, he seeks re-election next year.
However, political analysts say whether he retains the support of Iran's ruling establishment may be a more decisive factor in securing victory in the presidential vote.
The UN Security Council has slapped three sets of sanctions on Iran since 2006 over its nuclear plans. Iran has brushed off the impact but businesses say the penalties are biting by pushing up trade costs and deterring investors.
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