Iran’s rampant inflation called sixth-worst in world
Reports from The Centre for Research of the Islamic Parliament and news agencies inside Iran claim that, unlike many other countries in the world that have been able to curb their economic difficulties and their double-digit inflation, Iran is shouldering its worst inflation in the past 17 years with the highest inflation rate in the Middle East.
A chart, published by the centre on Monday February 18, ranked Iran’s inflation rate as the sixth-worst in the world.
On the same day, Iran’s Labour News Agency, ILNA, reported that the country’s inflation rate is the highest it’s been in the past 17 years.
The centre puts the Islamic Republic’s 2012 inflation rate at 21.8%, which is 3.4 times the median inflation rate in the countries of Southwestern Asia.
The Mehr New Agency says the centre states that Iran’s poor showing on the chart is because many other countries have managed to control their double-digit inflation rate in recent years.
The same chart shows the following countries had the worst inflation rates in 2012: Belarus, Ethiopia, Venezuela, Uganda, Sudan, Iran, Tanzania, Yemen and Guinea.
The same report claims that the widespread increase in prices started some 35 years ago with the increase in oil prices. This increase first had an impact on goods and services, then quickly spread to production lines and production costs and salaries, followed by an out-of-control increase in shares in the country’s finances but without investing the surplus back in the economy.
Next came new crises in areas such as labour, materials, limited market access, rapid inflation, transportation and energy etc., so that the failure to create a balance was inevitable and, hence, the only outcome was more new crises and double-digit inflation.
Last October, Hosseinali Shahriari, the head of Parliament’s Health Commission, warned that people are facing serious malnourishment. He continued that in today’s society, people are either poor or rich, and there is no middle class anymore because the inflation rate has grossly affected the social psyche.
He added that 70% of society is in psychological disarray.
ILNA also published a report indicating that this year Iran has broken the inflation-rate record of the past 17 years, reaching 32% to 37% .
This report projects that in the next calendar year, the rate will surpass the 50% mark.
The Central Bank of Iran sets the inflation rate at 32% based on price increases among 359 goods and services. However, people feel that many of these goods and services are irrelevant to their day-to-day needs and that the inflation rate is much higher for actual daily essentials, especially food.
Among the many reasons cited for rising inflation: cutting budget deficits through loans from the Central Bank, increases in the money supply and the cost of energy, the cancellation of government subsidies and mismanagement of currency market.