Iran’s inflation rate to hit 31.5% by yearend: central bank

TEHRAN,Feb.26(MNA) - The Central Bank of Iran announced that the inflation rate in the final month of the current Iranian current calendar year 1391, which ends on March 20, will hit 31.5 percent. The inflation rate had been projected to hit 32 percent, but measures have been taken to curb the rate at 31.5 percent, ISNA quoted Central Bank governor Mahmoud Bajmani as saying. In December 2012, IRNA quoted Finance and Economic Affairs Minister Shamseddin Hosseini as saying that the Iranian administration has special plans to curb a probable surge in inflation during the final months of the current Iranian calendar year, ending on March 20, 2013. Since recent rises in prices of goods are in close relation with rises in foreign currency prices, so we should rein in foreign currency shocks, he added. On January 14, MP Abdolkarim Hashemi told that the Iranian administration is facing problem in providing money for paying cash subsidies to the public. In such a situation, the second phase of the subsidy reform plan could not be implemented, he added. “For the time being, the government is providing necessary money out of sources other than freeing up prices based on the subsidy reform plan,” he noted. The subsidy reform plan pays out $37 to Iranians while eliminating subsidies for fuels and some commodities. Nearly 74.5 million Iranians receive cash subsidies. The government implemented the first-stage of its targeted subsidies plan towards the end of 2010 in an attempt to wean the country off food and fuel subsidies. At the time, Ahmadinejad called it the "biggest economic plan of the past 50 years". It allows the government to gradually slash subsidies on fuel, electricity, and certain goods over the course of five years, with low-income families being compensated with direct cash handouts.