Amid economic crisis and US sanctions, Iran’s annual inflation rate has soared to 36.9%, shattering the Rouhani Government’s achievement of a single-digit rise.
The Central Bank of Iran reported the jump, bringing inflation close to the level of 2013 when President Hassan Rouhani took office.
Amid problems with production, investment, trade, employment, and currency, the handling of inflation had been the Government’s greatest achievement. It reached an annual low of 7.9% in April 2018, just before Donald Trump withdrew the US from the 2015 nuclear agreement and ordered comprehensive sanctions from November 5.
The CBI said October’s price rises were 15.9% greater than those in September.
With the Iranian currency down 70% since January, some economists say the actual inflation rate is far higher than officially reported.Iranian media have warned about a hyper-inflation comparable to that in Venezuela, with rates of 50% to 65%.
But Rouhani insisted, during Saturday’s Parliamentary session in which he introduced a Cabinet reshuffle over economic matters, “Those who warn against hyperinflation either lie, or don not understand Iran’s economy.”
The President continued:
The idea of hyperinflation is based on a wrong economic and political analysis. Unfortunately we have left single-digit inflation behind, but we can harness inflation, and the jump in the inflation rate will not continue.
Unfortunately for Rouhani, the new Economy Minister Farhad Dejpasand said in his address to MPs that Iran is facing a hyperinflation. He later tried to correct the statement in a second speech.
Meanwhile, Foreign Minister Mohammad Javad Zarif insisted on Monday as he arrived in Turkey, one of Iran’s leading economic partners, “The possibility that the US will be able to achieve its economic goals through these sanctions is very remote and there is certainly no possibility that it will attain its political goals through such sanctions.”
Zarif maintained that a “special payments vehicle”, approved in principle with European Union officials last month, will be approved by the EU by November 4 — although he cautioned, “Due to the US pressure, it may take some time before this mechanism becomes fully operational.”