Oil exporting Iran prints enough money to drive inflation to 17%

TEHRAN, May 20, 2007 (AFP) – Iran’s inflation is set to rise to 17 percent this year with money supply growth continuing to soar, the central bank said on Sunday. A rate of 17 percent inflation in the Iranian year to March 20 would mark a 3.5 percentage point rise from the year earlier, amid rising concern about rising prices in Iran.

“We expect that inflation will reach 17 percent, money supply growth 40 percent and economic growth 5.19 percent,” said the bank’s research director Ahmad Mojtahed, according to the state news agency IRNA.

Parliament’s research centre has forecast that inflation will hit 23.4 percent this year after sharp rises in basic foodstuffs and services, especially after the Iranian new year period in March.

Economists have warned that the government of President Mahmoud Ahmadinejad risks fuelling inflation with high spending to fulfill promises he made during trips to the provinces.

They have also expressed concern over the high money supply growth forecasts — a key indicator of future inflation trends.

However Ahmadinejad has repeatedly defended his government’s record, saying that investment in Iran is on the up an