Iran General NewsIranian purchasing power has improved: Ahmadinejad

Iranian purchasing power has improved: Ahmadinejad


ImageAFP: Iranian President Mahmoud Ahmadinejad said on Tuesday that people's purchasing power has improved, as the country struggles with a inflation of more than 24 percent.

ImageTEHRAN (AFP) — Iranian President Mahmoud Ahmadinejad said on Tuesday that people's purchasing power has improved, as the country struggles with a inflation of more than 24 percent.

"All in all, people's living condition has improved from what we see in the per capita purchasing power statistics," Ahmadinejad told a televised press conference.

The president, who has repeatedly blamed external factors for high inflation, acknowledged however that "conditions are not what we would want in some sectors."

"In the housing sector, some social classes could be under pressure but, all in all, purchasing power has increased."

Ahmadinejad's comments come a day before parliament is to impeach Commerce Minister Masoud Mir Kazemi over high prices, especially of staple goods.

The inflation rate in the 12 months through the Iranian month of Farvardin (ending on April 19) was 24.2 percent, the central bank has said. In the previous month alone, consumer prices rose 3.1 percent.

Ahmadinejad came to power in summer 2005 promising that ordinary people would feel the benefits of the country's oil wealth.

One of his government's measures to fight inflation has been to increase imports.

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

"External factors beyond the government's power have interfered but we try to resolve them," Ahmadinejad stressed.

Reformists and conservatives alike have intensified their criticism of Ahmadinejad for his complaints against his political opponents and what he calls a "mafia for disturbing the economy."

"The reasons for inflation have become precisely known and we will present our economic plan to solve them in the first week of Tir (late June)," Ahmadinejad promised.

"I will personally intervene in the housing sector and will supervise this issue."

He also vowed to improve the situation of low-income citizens and pensioners, in particular by raising salaries.

"Of course, the necessary budget to this end (increasing salaries) has not been allocated to us (by the parliament) this year. But the government is seriously trying to manage the budget to increase salaries of the retired and state staffers."

The move could lead to a sharp increase in money supply growth — a key indicator of future inflation trends — which hit almost 40 percent yearly since Ahmadinejad's election.

Economists have also blamed Ahmadinejad's government for adding further expansionary heat through injecting money in different forms to an already inflationary economy.

Former economy minister Davoud Danesh Jaafari, sacked by Ahmadinejad earlier this month, had admitted the government failed to control inflation and accused the cabinet of failing to understand the link between money supply and prices.

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