Inflation in Iran hits three-year high

Inflation in Iran hits three-year high

International sanctions and cuts in government programs are to blame

Ilan Ben Zion, a reporter at the Associated Press, is a former news editor at The Times of Israel. He holds a Masters degree in Diplomacy from Tel Aviv University and an Honors Bachelors degree from the University of Toronto in Near and Middle Eastern Civilizations, Jewish Studies, and English.

Iranian President Mahmoud Ahmadinejad (photo credit: AP/Vahid Salemi)
Iranian President Mahmoud Ahmadinejad (photo credit: AP/Vahid Salemi)

Iran’s inflation rate has nearly doubled in the last year, the Iranian Central Bank announced on Sunday.

Inflation in urban areas was 21.5 percent as of the end of the Iranian year, in March 2012. The cost of goods and services rose 12.4% since March 2011.

Some Iranian lawmakers attacked President Mahmoud Ahmadinejad’s economic policies last month during a parliamentary inquiry.

Many Iranians believe that the real inflation rate is higher than the official rate, and some clerics and lawmakers have accused the government of providing incorrect figures, Reuters reported.

Inflation stood at 8.8% in August 2010. It has risen steadily since then, due in part to the government’s termination of food and fuel subsidies in December 2010, and also because of crushing international sanctions. Sanctions have driven down the Iranian rial, which in turn increased inflationary pressure by making imports more expensive.

The rial’s free-market rate has halved against the dollar in the past year and currently stands at 11,335 to the dollar.

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