Iranian MP says government must tackle economic downturn rather than inflation

Business Materials 3 June 2015 14:40 (UTC +04:00)

Tehran, Iran, June 3,

By Temkin Jafarov, Mehdi Sepahvand - Trend:

A recent report by the Central Bank of Iran said that last Iranian fiscal year (which ended March 20), the country's liquidity increased by 22 percent.

The government must define a comprehensive system where strong management is yielded over how much liquidity goes into production and how much goes into non-productive activities, Iraj Nadimi, first deputy chairman of the Iranian Parliament's Economic Commission, told Trend June 3.

He said while the government's efforts to lower inflation are praiseworthy, care must be taken not to cause an economic downturn.

"Between downturn and inflation, we have no choice but to eliminate the downturn, because we have problems in employment, livelihood, imports, exports, factories not working, etc., so we have to define a set of rules," Nadimi stated.

We ask the government to define demand, defining demands means liquidity growth, he said.

"At the same time that we set a management system over inflation and liquidity, we must not turn the market down and then brag about how small inflation is. The government must take care of the multiplicity of factors," the MP further said.

The Central Bank of Iran (CBI) announced that the inflation rate for the 12-month period to the second Iranian calendar month of Ordibehesht (ended on May 21) hit 15.5 percent.

The Central Bank also said that the consumer price index (CPI) in Iran 's urban areas stood at 221.8 units in the second month of the current fiscal year, which is one percent more than its preceding month.

The figure also indicates an increase by 16.2 percent compared to the same month of last year.

Iran's gross domestic product (GDP) growth rate hit 3.6 percent in the first nine months of the past Iranian fiscal year (March 21-December 21, 2014).

Through adopting policies to curb liquidity and managing the foreign currency market, the inflation rate decreased by 19.1 percent, reaching from 34.7 percent two years ago to 15.6 percent last year, and to 15.5 percent in April.