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10/19/03

Iran's Inflation rate rises to 14.6 percent

Inflation in Iran continued its upward trend for the second consecutive year, going up to 14.6 percent in a year to Shahrivar, the sixth month in Iranian calendar, 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 14.6 percent in Shahrivar compared to the figure for the corresponding month last year and fell by 0.2 percent in the month to 234.2 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 16.8 percent in Shahrivar, the sixth month in Iranian calendar, 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 - 10/19/03 ... --



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