Iran annual inflation 'down by more than half'

Iran's year to March 2010 inflation fell to 10.8 percent, down by more than half from the previous year, IRNA said.

Iran annual inflation 'down by more than half'

Iran's year to March 2010 inflation fell to 10.8 percent, down by more than half from the previous year, the official IRNA news agency reported quoting the central bank.

IRNA said inflation in the previous year to March 2009 was 24.5 percent.

Inflation in the Islamic republic, OPEC's second biggest oil exporter, has been its greatest economic challenge and had peaked in September 2008 to 29 percent.

Easing inflationary pressures could help President Mahmoud Ahmadinejad, re-elected for a second four-year term in June in a disputed vote, to counter criticisms over enforcing a subsidy reform plan that might stoke price rises and hurt the poor.

Last month parliament passed a state budget for the Iranian year, which started on March 21, that did not contain the radical reductions in subsidies sought by Ahmadinejad. Under the plan, food and energy subsidies would be phased out over five years.

Ahmadinejad sent a letter to parliament calling for a "review of the subsidy law" to reconsider their rejection of government proposals to slash costly subsidies by $40 billion.

Removing subsidies could make Iran less vulnerable to any possible Western sanctions over its nuclear programme.

The average rate over the last 12 months, compared with the previous year, fell to 11.3 percent from 13.5, IRNA said, quoting the central bank report.

Critics accuse Ahmadinejad of stoking inflation with reckless spending of petrodollars since 2005, when he first came to office, pledging to share out Iran's oil wealth more fairly.

The government blames inflation on international energy and food price rises that peaked during 2008 and points to a falling trend since late last year.

Economists say the inflation decline is due to various reasons such as a slowing economy as a result of lower crude prices over the last year and the global economic downturn, and also monetary tightening by the central bank.


Agencies

Güncelleme Tarihi: 05 Nisan 2010, 17:14

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