Iran inflation accelerates, poses headache for Rouhani

The Daily Star

DUBAI: Iran’s inflation rate surged to 45 percent in June, official data showed, adding pressure on squeezed Iranian households and an indication of the huge task President-elect Hassan Rouhani faces to repair the economy. Spiraling prices and constricted spending power have left millions of Iranians struggling against a virulent combination of Western economic sanctions and poor fiscal management.

Rouhani, a former nuclear negotiator, was elected last month on a campaign that prioritized Iran’s economic difficulties and vowed to create a government of “prudence and hope” to restore the country’s financial health.

But while a majority of the country’s political factions have hailed his victory, the inflation rate will be a big concern for the moderate sheikh who takes office on Aug. 4.

Prices rose 45 percent in the month up to June 21 compared to the same month a year earlier. They accelerated from 41.7 percent inflation in the month to May 21.

Prices rose 25 percent in the corresponding calculation for last year, official figures showed.

“The central bank has announced the price index for goods and consumer services ... for the month of Khordad this year [ended June 21] ... the inflation rate reached 45.1 percent,” the Mehr news agency reported late Wednesday.

Inflation averaged 35.9 percent over the 12 months through June 21, the country’s central bank said earlier this month.

Independent analysts say that the official figures do not show the real picture and some estimate actual inflation is double the official figures or more.