Baku, Azerbaijan, Feb. 4
By Elnur Baghishov – Trend:
According to forecasts, inflation in Iran will be 40-50 percent next year (starting March 21, 2019), Hojjat Zabeh Haghighi, Iranian economics expert, told Tasnim News Agency, Trend reports.
According to him, if $1 currently equals to 110,000 rials, this currency has risen by about 300 percent, although its price previously was 36,000 rials.
Haghighi added that, with the foreign currency rising threefold, the prices of products did not increase, because the market is currently lacking the necessary conditions for the prices to increase threefold.
"The necessary conditions need to be fulfilled – that is, the purchasing power of citizens should increase. In such a case, the price may rise threefold in comparison with the first months of the current year (started March 21, 2018)," he said.
According to him, with the increase in salaries next year, the decline in purchasing power of the citizens will partially improve, and so prices will rise.
"We have to take into account that the inflation is fluctuating," he said.
The economist remarked that Iran's manufacturing sector has some weaknesses and can not create workplaces properly, and thus the government is forced to keep investing to the country's economy. This leads to an increase in inflation.
"There are no dead ends in economy. Because with the private sector developing, the infrastructure necessary for the economy is created and leaves state ownership," he said.
According to Haghighi, there have been problems in recent years in Iran’s production facilities, even in terms of food production.
Haghighi added that, in the current state of affairs, both live animals and animal feed on the one hand, and rice and oil crops on the other hand, are being imported – which is tantamount to tragedy.
"Because if there are [for example] no mobile phones [being imported], no serious incidents occur. But failure to import basic products creates problems," he said.
He pointed out that the government is currently intervening in all economic sectors.
"At present, exporters are unable to properly export their goods because of having to return the foreign currency derived from export. Some of them ended up abandoning this job," he said.
"The main complaint of Iranian businessmen about the economic conditions in the country is the fact of an ever mighty public sector standing on the way whenever the private sector wants to operate," he said.
Haghighi said that all of this leaves the private sector in ruins.
"If it had not been for an external interference in the market, meat prices would not have reached 1 million rials (app. $23.8) by now, as, had the prices for this product gradually risen to 400,000 rials (app. $9,52), then 500,000 rials (app. $11,9), then 600,000 rials (app. $14,2) and reach 1 million rials by now, the consumers would never be left shocked," he said.
Haghighi said that a reduction in the prices of products that have ended up costing more is out of the realm of possibility. He also highlighted that inflation has not diminished in recent years.