Saturday, December 15, 2007

Critics blame Ahmadinejad's policies for rising inflation

From Lebanon:

TEHRAN: Iran's year-on-year inflation rate climbed to 19.1 percent in November, ticking up by 2 percentage points from the previous month's figure, the central bank head announced on Wednesday. "Inflation reached 19.1 percent in the month of Aban," Tahmasb Mazaheri told state television, referring to the Iranian month which ended on November 22.

According to a statement by the central bank, inflation stood at 16.8 percent in the previous month of Mehr ending October 22, compared to the same period the previous year.

The figures confirm the sharp rise in prices of basic goods in Iran over the past months, which have hit the poor hardest and become a major political issue ahead of March elections.

Opponents of President Mahmoud Ahmadinejad have accused him of stoking inflation by throwing money into infrastructure projects promised on local trips and handing out generous loans to the poor.

The government has acknowledged that inflation exists but maintains Iran's economy is in good shape and it is doing all it can to combat rising prices.

Ahmadinejad said on Tuesday that new measures were on the way.

The new figures already top the central bank's overall prediction for the Iranian year 1386, which ends in March 2008.

It forecast in May that inflation would reach 17 percent in 1386, compared with 13.5 percent in the previous year.

Many economists disputed this figure and Iranian parliamentary research has estimated that inflation this year will be running at 22.4 percent.

Critics blame Ahmadinejad's expansionary economic policies for the colossal money supply growth in Iran - currently running at around 40 percent - and warn the situation could get worse.

Ahead of crucial March 14 legislative polls, prominent moderates like reformist former President Mohammad Khatami have publicly lambasted Ahmadinejad for his handling of the economy.

The president was elected in 2005 on a platform of making the poor feel the benefits of Iran's massive oil wealth and has made implementation of economic "justice" the main government slogan. - AFP

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