Monday, February 9, 2009

Iran inflation slips to 24%

TEHRAN – Iranian inflation -- one of the biggest economic problems facing the country -- dropped to 24 percent in January, a central bank report said on Sunday.
Inflation in urban areas dipped to 24 percent in the Iranian calendar month of Day ending January 19 from 26.4 percent in the previous month of Azar, the bank said on its website.
The latest figure indicates a significant fall since September when inflation peaked at 29.5 percent.
Central bank chief Mahmoud Bahmani has vowed to cut inflation to around 22 percent by March 20, the end of the current Iranian year, through a strategy of "increasing production and supplying goods proportionate to demand."
Central bank officials have cited growth in money supply as the prime factor for the surge in the inflation, along with rising global prices.
President Mahmoud Ahmadinejad, who is facing re-election in four months, has been under fire over his expansionary economic policies for fuelling inflation.
Analysts predict that the government's injection of oil money into the economy would keep the inflation considerably high for months and years to come despite the central bank's efforts to shrink the excessive liquidity.