Domestic Economy

Long-Term Plan Will Help Tame Inflation

Long-Term Plan Will Help Tame Inflation
Long-Term Plan Will Help Tame Inflation

Top presidential advisor Masoud Nili said on Tuesday that the government is trying to control the monetary base growth in a bid to further lower the inflation rate next year.

Inflation has been experiencing a falling trend over the past 16 months and is now hovering around 17 percent.

"The inflation needs to be restrained through a long-term plan," the official said in a press conference in Tehran.

President Rouhani has on several occasions said the government's top priority is to reduce the inflation rate, which reached 40.4 percent in October 2014.

The CBI has published several reports over the past months, which were contested by some economists. One report indicated that the Inflation rate was reduced to 17.2% in the month of Azar (ending December 21). Another report showed the economy grew by 4.6 percent in spring and by 3.7 percent in summer. GDP growth in the first half of the fiscal year (ending Mach 20) reached 4 percent. Prior to spring, the Iranian economy experience two years of negative growth.

"The recent growth report does not mean that all economic activities in the country are recovering. It basically means that economic activities on average have showed a positive trend," Nili said, endorsing the CBI's recent reports.

>>>Need for National Unity

Nili said Iran's current economic hardships, including high unemployment rate, need to be tackled through national unity.

"Unemployment is the biggest challenge ahead of Iran's economy," he said.

The problem can be solved only through "sustainable and steady economic growth," which he said would only be feasible through the easing of investment regulations.

"We have to make every effort to create jobs for the generation born during the sixties (Iranian calendar)," Nili underlined. Iran had a population boom in the 1980s (Gregorian calendar).  

Economists believe that the next decade will be a critical period for the economy, and the job market in particular, as four million university graduates are expected to join the already four million jobless population in a few years, leaving about 10% of the total population jobless.

Experts say at least one million jobs need to be created every year so that the government can tackle the rising unemployment rate. The government has vowed to allocate almost 20 trillion rials out of its 2,673 trillion-rial general state revenue next year to partly solve the unemployment problem.