Iran inflation tops 26-pct amid 40-pct money growth

TEHRAN, July 5, 2008 (AFP) – Iran’s inflation rate, which has provoked intense criticism of the government, topped 26 percent in June, according to a central bank statement published in the press on Saturday. “During the Iranian month of Kordad (to June 20) inflation reached 26.4 percent compared with the same month a year ago,” according to the statement published in the economic newspaper Sarmayeh.

The previous month, annual inflation was running at 25.3 percent.

President Mahmoud Ahmadinejad has been blamed by many economists for directly fuelling the price rises by ploughing huge amounts of cash into the economy to fund local infrastructure projects.

There has been a sharp increase in money supply growth — a key indicator of future inflation trends — to almost 40 percent during the years of the Ahmadinejad presidency. He was elected in 2005 on a platform of making the poor feel the benefits of the OPEC member’s massive oil wealth, and he has made implementation of economic “justice” the main government slogan.