Iran, Tehran, Feb. April 21
By Milad Fashtami - Trend:
Head of Export Commission of Iran's Chamber of Commerce, Industries and Mines warned that the government needs to postpone implementation of the second phase of subsidy reform plan to next Iranian calendar year (to start on March 21, 2015).
Assadollah Asgaroladi said that considering the current situation and the rising trend of US dollar exchange rate in the free market, the country's inflation may even exceed 40 percent, Iran's Mehr News Agency reported.
"The price of USD is on the rise at the free market. If the government decides to implement the second phase of the subsidy reform plan, then we should expect the recession to deepen," he said.
"Implementation of the first phase of the plan concurrent with the increase rate of USD caused Iran's inflation to jump significantly, so the government needs to learn a lesson from the past experiences," he added.
Iranian parliament (Majlis) approved that the government should implement the second phase of the subsidy reform plan at the beginning of the second quarter of the current Iranian calendar year (which started March 21), Iran's IRNA News Agency reported on February 4.
Vice President for Executive Affairs Mohammad Shariatmadari will be in charge of carrying out the second phase of the subsidy reform plan.
The Iranian repeatedly asked rich families to voluntarily give up receiving cash subsidies.
The government previously hoped that about 30 percent of Iranian families give up receiving cash subsidies, but officials say that the number of people who actually agreed, is not satisfactory.
The subsidy reform plan pays 45,500 rials (about $18 based on the U.S. dollar official exchange rate of 24,800 rials) to Iranians, eliminating subsidies for fuels and some commodities.
Head of Parliamentary Economic Committee Gholamreza Mesbahi Moqaddam has said the subsidy reform plan put into place by the administration of former president Mahmoud Ahmadinejad has created $13 billion more in liquidity than anticipated.