TEHRAN (AFP) – A leading conservative Iranian MP has charged that the government’s economic policies are causing inflation to spiral out of control, amid mounting concern over rising prices.
“The general level of prices in some items has gone out of control,” said Mohammad Reza Bahonar, the deputy parliament speaker and a leading MP from the majority conservative faction.
Denouncing President Mahmoumd Ahmadinejad’s spending, Bahonar said: “The high government spending has led to a rise in liquidity, which has affected some sectors such as housing.”
The government has promised low-interest loans for housing, a move that has increased demand in the sector and thus increased rents and purchase prices, he said Sunday.
According to independent experts, housing prices have increased by 25 percent in the past few months.
Ahmadinejad was elected on a platform of delivering the fruits of the oil wealth of OPEC’s second largest producer back to the people.
“The government insists on high spending, but the parliament is against increasing that budget which would be inflationary,” Bahonar said, referring to the next year’s budget bill which is due to be debated in January by parliament for final approval.
According to official figures, inflation is around 12 percent, but economists believe the figure to be much higher and at least 20 percent.
In October, Iran’s supreme leader Ali Khamenei urged the government to stifle surging prices, in an intervention that underlined mounting inflation concerns in the Islamic republic.
Having warned against expansionist economic policies, academics and experts have been repeatedly criticising Ahmadinejad’s policies for “lacking a scientific and expert basis” and predicted “persistent inflation”.