Experts Warn on Possibility of Inflation Ratio Rise to 69% in Iran

Business Materials 24 September 2008 14:20 (UTC +04:00)
Experts Warn on Possibility of Inflation Ratio Rise to 69% in Iran

Azerbaijan, Baku, 24 September / Trend corr. T.Jafarov, D.Khatinoglu / Inflation in Iran may rise twice, as the Iranian Labor Ministry has sent great flow of monetary means to realize a plan on the Labor Centers of Quick Efficiency, Bijan Bidabad, a former expert of the Central Bank of Iran, believes.

Tehmasud Mezahiri, the chairman of the Central Bank of Iran, was dismissed, because he refused to allocate extra means for the plan of the Labor Ministry, the Iranian agency Fars reported on 21 September. Although this data was denied, the Iranian media repeatedly mentioned presence of conflict between the Central Bank and the government in connection with the former chairman's refusal to allocate means to realize the Labor Centers of Quick Efficiency.

If the Central Bank allocates necessary means for realization of the plan under the Labor Ministry's pressure, inflation ratio level in Iran can exceed 47%, Bidabad, the Professor of the Tehran University, told Trend . A total of $22bln has been allocated to realize the plan and dispute between the Central Bank and government is for allocation of extra $66bln.

According to official statistics, inflation ratio in Iran exceeded 27%.

The plan on the Labor Centers of Quick Efficiency offers means only on acquaintance, as if people are employed, whilst nothing is made on this matter, Bidabad said.

"Iran should thoroughly build its work and invest in main industry," Bidabad told over telephone from Tehran.

A special program, opening new plants, manufacture and realization of production are necessary to hold reforms in the economy, Kamran Dadkhah, another Iranian expert residing in the United States and Professor of Economy at the Northeastern University, believes.

"Allocation of new means by the Central Bank will be incorrect step," Dadkhah told Trend over telephone from Washington on 23 September.

Allocation of such amount leads to waste of the state means and have raised the inflation ratio level to 30, he said. Allocation of extra means will cause that inflation ratio will rise to the level of the World War II period and may reach 60%, Dadkhah said.

Two weeks ago Mohammad Jahromi, the Labor Minister of Iran, applied to President Mahmoud Ahmedinejad with a letter and asked his own resignation, as well as removal of the Central Bank's had from the position.

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