Government Policies To Widen Deficit, Exacerbate Inflation

April 2007 | Economic Analysis

Despite rising inflationary pressures and rampant liquidity growth, the Iranian parliament (majlis) has approved the government budget for fiscal year 2007/2008, which according to reports projects a 20% rise in spending from the previous budget. While no breakdown of the budget has been published yet, reports suggest that majlis members, despite their reservations, chose not to amend the plans in order to let the president shoulder the full burden of its imprudent policymaking. This will further stoke inflationary pressures in the country, damage consumer and business sentiment and hit growth. The move by 150 (out of 290) members of the

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