Iran General NewsIran economists warn Ahmadinejad on inflation

Iran economists warn Ahmadinejad on inflation

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AFP: More than 50 Iranian economists have written an open letter warning President Mahmoud Ahmadinejad his economic policies are fuelling inflation and hurting the poor, the ISNA agency reported on Monday. TEHRAN, June 11, 2007 (AFP) – More than 50 Iranian economists have written an open letter warning President Mahmoud Ahmadinejad his economic policies are fuelling inflation and hurting the poor, the ISNA agency reported on Monday.

“The monetary and banking policies adopted by the government go against their stated objective of creating justice” in society, read the text of the letter, signed by 57 economists.

“The price of decisions that have no scientific basis is very high and irreversible, in particular for those who are worst off,” it added.

The most prominent signatories included Mohammad Satari-Far, a former chief of Iran’s planning and budget organisation, and an ex-chief of the Iranian stock exchange, Hossein Abdeh Tabrizi.

Both were in their posts during the tenure of Ahmadinejad’s reformist predecessor Mohammad Khatami.

The government has already been the target of criticism in recent weeks over a surprise rate cut which economists said risked overheating the economy and appeared to have been adopted without the knowledge of the economy ministers.

Ahmadinejad have been repeatedly criticised by the press for stoking already high inflation in the Islamic republic with high spending and promising lavish local investment projects on provincial tours.

The central bank has predicted inflation will rise to 17 percent in the year to March 2008, a 3.5 percentage point rise from the previous year. Some economists expect the number to be even higher.

Money supply growth is running at around 40 percent and there has been an evident jump in the price of basic services foodstuffs — especially poultry and vegetables — since the start of the Iranian New Year in March.

However the president, who was elected in 2005 on a platform of distributing the country’s riches more evenly, insists inflation is under control and that the government is doing all it can to reduce poverty.

The letter also criticised Iran’s “growing dependency on oil revenues” and said Tehran should “employ a policy of understanding with the world” at a time of growing international tension over its nuclear programme.

It warned there would be a “high price” to pay in Iran’s financial and commercial relations with the outside world if there are political tensions with the international community.

Iran needs “foreign investment and new technology to allow a stronger growth of the economy,” it said.

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