Iran News ...


12/23/03

Iran's inflation rate rises further to 16.5 percent

Inflation in Iran continued its upward trend for the second consecutive year, going up to 16.5 percent in a year to Aban, the eighth month of the Iranian year, with manufactured goods and foodstuff becoming costlier, IRNA reported from Tehran.

Reflecting the increased cost of living, the general price line, measured by the wholesale price index (WPI), rose by 15.5 percent in Aban compared to the figure for the corresponding month last year and fell by 1.2 percent in the month to 238.6 points compared to the previous month of Mordad as prices of basic commodities and fuels continued their downward trend compared to those in the previous year's level.

The final WPI rose by 16.2 percent in Aban, the eighth month of the Iranian year, while the final point-to-point inflation for Tehran showed no change.

In Iran, inflation is mainly caused by banking mismanagement, staggering loan and borrowing, mostly by the state organizations, government's domination of key economic sectors, indiscriminate allocation of subsidy both to the poor and the rich, and government's expansionary policies.

The fixed income group, which includes employees and workers, suffer the most from inflation.

Government has been trying to follow deflationary policies, including raising taxes, issuing participation bonds, and revising banking policies.

... Payvand News - 12/23/03 ... --



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