Baku, Azerbaijan, Apr.20
By Fatih Karimov - Trend:
The implementation of the second phase of the subsidy reform plan in Iran will lead to a rise in the inflation rate, Iranian MP Gholamreza Mesbahi Moqaddam said.
He criticized the current method of implementing the subsidy reform plan, warning of a budget deficit, as well as non-allocation of budget to health and production sectors, Iran's Fars news agency reported on April 20.
The important issue is that both people and producers should improve consumption patterns, he noted.
However, the advisor to Iranian president, Mohammad Kordbacheh said on April 13 that the implementation of the second phase of the subsidy reform plan will not lead to a sharp rise in the inflation rate.
"Although fuel prices rose by 600 percent in the first phase of the plan, the inflation rate increased by 10 percent," ISNA news agency quoted Kordbacheh as saying.
"Fuel prices are planned to be increased by 60 percent on the average. Therefore, it will not lead to a hike in the inflation rate," Kordbacheh added.
Iranian President Hassan Rouhani earlier said that he will accept full responsibility for implantation of the second phase of subsidy reform plan, Iran's Mehr News Agency reported.
"The country's inflation rate is projected to drop to 25 percent by the end of the current Iranian calendar year (March 20, 2015)," he said.
"Improving relation with foreign countries may even cause the figure to fall below 25 percent," he explained.
The president put the Iranian government's total income at around 1,480 trillion rials (some $48.36 billion based on the exchange rate of USD at the free market).
"My government faced severe economic problems in the past year but I never allowed borrowing money from the central bank," Rouhani added.