TEHRAN (AFP) — Iranian President Mahmoud Ahmadinejad has said the country's economic woes can be solved by the "culture of martyrdom, the Mehr news agency reported.

"If we want to build the country, maintain our dignity and solve economic problems, we need the culture of martyrdom," Ahmadinejad was quoted as saying in a speech on Wednesday in the western city of Hamedan.

He described martyrdom, dying or being killed for one's religious beliefs, as "a quick and shortcut way to reach the summit of salvation."

He did not say how becoming a martyr would help the economy, which is struggling from high inflation.

The president was speaking a day after ousted economy minister Davoud Danesh Jaafari became the latest person to launch a withering attack on him for his unconventional economic policies.

Ahmadinejad has been criticised for pumping excessive liquidity into the economy to fund infrastructure projects, causing huge money supply growth and triggering Iran's current inflation of around 18 percent.

However, critics believe the real inflation rate exceeds 25 percent, and have accused Ahmadinejad of making unscientific decisions in economic matters.

Ahmadinejad rejects such criticism.

"When we insisted on cutting bank interest rates some objected and said this is not scientific, but we tell them that if they are not men of justice, they had better clear the way and leave," he was quoted on Thursday by the Etemad Melli newspaper as saying.

Last year, Ahmadinejad slashed interest rates of state and private banks to 12 percent, triggering a sudden demand for loans that economists blame for adding further expansionary heat to an already inflationary economy.

The Central Bank of Iran, headed by Tahmasb Mazaheri, is arguing for an increase in interest rates.

In his remarks on Wednesday, former economy minister Jaafari said "during my time, there was no positive attitude towards previous experiences or experienced people and there was no plan for the future.

"Most of the scientific economic concepts like the effect of liquidity on inflation were put in question," he said.

Criticism of the president has been mounting in recent weeks, amid clear signs the country's political elite are gearing up for presidential elections in 2009, with Ahmadinejad expected to seek a second term.

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