Rising Inflation in Iran

Ahmad Tavakoli, the influential member of Majlis and the chairman of the Iranian parliament’s research center, said in Tehran that the country’s rate of inflation has reached 27 percent.

“According to Statistics Center of Iran (SCI)’s Price Index, the annual rate of inflation for the period ending in Iranian calendar month of Mordad (21 August) reached 27 percent,” Tavakoli said [Alef, 9 October].

The SCI, the government’s statistics and census organization, had announced last month that the annual rate of inflation for the period ending 21 July was at 19.6 percent. The jump of more than seven percent in annual rate of inflation in just one month is very significant and explains the anecdotal evidence of rapidly rising prices, such as the sharp rise in the price of eggs in the recent days.

The SCI’s new inflation rate, as announced by Tavakoli, contradicts an announcement made yesterday by the minister of finance and economy, Shamsodin Hosseini, who serves as the government’s economic spokesman, that the annual inflation rate stood at “around 17 percent.”

“According to the latest statistics, the inflation rate is around 17 percent… which is normal considering the rise in energy and food prices and the global rate of inflation,” Hosseini said [Fras News Agency, 9 October].

The SCI, however, is theoritically the country’s sole authority to calculate and publish the official rates of inflation and economic growth.

The latest announcements on inflation also refute an IMF prediction last August that Iran’s annual rate of inflation would be at 12.4 percent.

Tehran: NIE Revisited

The US intelligence community’s latest NIE on Iran was initially welcomed by Iranian officials. President Ahmadinejad called it “the greatest victory in Iran’s history in this century.” In the week that followed, a number of politicians and the media began to reassess the effect of the NIE. Iran's Foreign Minister Manouchehr Mottaki stated that only 70% of the NIE is "correct." The moderate press warned against premature celebration of a report that has accused Iran of illicit nuclear activities until 2003.

In one of the biggest reversals in the history of US intelligence, the new NIE said Iran did not have a bomb and it was not working on a bomb. Ahmadinejad immediately declared victory and expected to receive unqualified praise from all politicians. On the eve of all-important parliamentary elections, he also wanted to use the occasion to solidify his hold on power. Things did not quite turn out that way. Ahmad Tavakoli, and influential conservative member of Majlis, wrote an open letter to Ahmadinejad questioning the wisdom of “expressing boundless joy” with regard to the NIE.

Tavakoli argued that the NIE had accused Iran of illegal nuclear weapon activities in the past. Tavakoli also took exception with the wisdom of government’s pro- International Atomic Energy Agency (IAEA) stance. He warned Ahmadinejad that the government’s unqualified praise of the IAEA can backfire soon. It was the IAEA after all that had originally referred Iran’s case to the UNSC. Tavakoli’s letter was approvingly quoted in the more moderate and liberal press.

Comments by the US Secretary of Defense Robert Gates at a conference in Bahrain fueled the concerns in Tehran. Gates attacked Iran’s foreign policy for its destabilizing effects in the region and called it a threat to the national interests of the United States. “Everywhere you turn, it is the policy of Iran to foment instability and chaos, no matter the strategic value or cost in the blood of innocents — Christians, Jews and Muslims alike,” said Gates. The American defense chief also called on Iran to immediately suspend its uranium enrichment program and vow to never again resume its nuclear weapon program.

A day earlier, the commander of US naval forces in the region had warned against the Iranian threat. US Vice Admiral Kevin Cosgriff, Commander of US Naval Forces Central Command (NAVCENT), had emphasized his concern by saying, “I wake up thinking about Iran, I go to bed thinking about Iran.”

Tehran is starting to realize that the NIE might not have been an occasion for “boundless joy.” It is yet to be seen if Ahmadinejad’s early enthusiasm about the report, however, would translate into more moderation in his foreign policies and a move towards reconciliation with the West