Iran: Inflation and corruption are two sides of the same coin

Iran: Inflation and corruption are two sides of the same coin

Corruption and skyrocketing inflation are hallmarks of the regime ruling Iran

Analysis by PMOI/MEK

Iran, July 29, 2019 - While Iranian regime President Hassan Rouhani expressed his optimism for Iran’s economy in a cabinet meeting on July 23 and his first deputy, Eshaq Jahangiri, claimed that the mullahs have overcome the economic crisis and reached the shores of stability, Iranian media announced the next day that inflation has crossed the 40 percent threshold.

Iranian state-run media reported on July 24 that inflation is 40.4 percent. “The government is the main culprit for increasing prices because by changing the price of the U.S. dollars that are used to import meat from 42,000 rials to more than 80,000 rials, they’ve created the conditions for increasing prices in the market,” they wrote citing Tehran’s pundits.

Mohammad Gholi Youssefi, an Iranian economic pundit close to the regime, says “the government’s aimlessness in organizing the country’s economy… has put us in a crisis riddled situation and implementing any decision is rendered very difficult and results in negative consequences.”

“Managerial inefficiencies and the inability of officials and concerned people to organize the country’s economic situation has led to an increase in poverty across the country. Economic pressure on the people is mounting every day,” he further said.

Tabnak website, close to Mohsen Rezaee, former Revolutionary Guards (IRGC) chief and current secretary of the Expediency Discernment Council, also weighed in on this matter. “It was supposed that electronic coupons are distributed among the people to support them. The issue has been studied for months and there is still no result. Or it was supposed that monetary subsidies are increased but that didn’t happen either,” he writes.

Tabnak’s article then concludes: “These issues lead to the gradual increase of the impact of rising currency prices in Iran’s consumer market.”

Vahid Shaghaghi, an Iranian economic pundit, says that considering that inflation has crossed the 40 percent mark, the current process will lead to a “50 percent inflation” over the next four to five months.

Jihad Azour, director of the International Monetary Fund’s Middle East and Central Asia Department, predicts that in light of increasing sanctions imposed on Iran, the country’s inflation rate will rise further to 50 percent this year.

“While sanctions waivers for buying oil from Iran are not extended and U.S. sanctions against Iran are increased, we predict that inflation in Iran will increase to more than 50 percent this year. It means an increase in living costs and consumer goods prices,” he said.

The Iran newspaper, Rouhani’s official mouthpiece, implicates the IRGC for economic failures by accusing this entity of running illegal financial institutions. “Monetary policies are not the unique mandate of the government anymore, and illegal monetary institutions have reached a point where they manage about 25 percent of the country’s total liquidity without accepting any supervision by the central bank. Appeasing this illegal institution is resulting in their corruption spreading over even to banks. This has brought an about huge financial crisis upon the government.”