Iran is facing stagflation and a 20-percent decline in national revenue, according to Massoud Nili, the economic advisor to President Hassan Rohani.
Stagflation cartoon by Alex Hughes
|Stagflation, a portmanteau of stagnation and inflation, is a term used in economics to describe a situation where the inflation rate is high, the economic growth rate slows down, and unemployment remains steadily high. It raises a dilemma for economic policy since actions designed to lower inflation may exacerbate unemployment, and vice versa. (read more on wikipedia)|
In an interview with ILNA, Nili said this level of stagflation is unprecedented in the post-war period, adding that in the past two years, economic growth has been negative while inflation has been consistently above 30 percent.
In the past eight years, according to Nili, oil revenues shot up, creating a crisis and causing a decline in domestic production, which in turn caused the rise in inflation. "Even without sanctions, this state of affairs would have led to inflation," Nili said.
He maintained that the economic situation has improved somewhat this year compared to last year, adding, however, that "one should not expect miracles."
He stressed that the Rohani administration is trying to bring inflation down to the single-digit level and has called on all experts to share with the government their ideas for solutions.
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