Inflation & Outlook

Fragile Low Inflation Rate?

Increase in money supply would increase inflation rate. In Iran, however, the trend seems to be different. Inflation rate reached 12.6% in January 2016, from 40.2% in September 2013. While money supply has increased 25.9% in 2013, 22.3% in 2014 and 27.2% in 2015.
There are two scenarios; Central Bank of Iran believes that lack of structural studies during Ahmadinejad presidency caused the statistics to be unrealistic and the real money volume has been worse than what was known. Second scenario suggests that high banking return rates have attracted money into banks; as soon as banking return rates decrease, money injected into the economy would present itself in the form of inflation.

1395: How will Iranian Economic look like?

In the conference “Outlook of Iran Economy in 1395”(remark: the year 1395 goes from March 20, 2016 till March 19, 2017), Dr. Hossein Abdoh Tabrizi, Senior Consultant of Minister of Roads and Urban Developments, presented his forcasts for the next Iranian fiscal year, as the following: Growth rate will be around 4-5%, Inflation rate around 10-12%. Bank interest rate will reach 15% and the return profit from Stock Exchange will be more than bank interest payments.
Unemployment rate would experience serious improvement, as labor force participation remains as low as 40%: 62% for men and 13% for women. Dependency rate in Iran is also as high as 3.7%.