Iran’s inflation rate touched a two-year low last month, indicating that President Hassan Rouhani’s efforts to lower the cost of living is bearing fruit.
Consumer prices surged 23 percent last month from a year earlier, down from 29 percent in January and June’s record high of 45 percent. All the nine out of the 10 sub-indexes, such as food, clothing and transport that were tracked by Iran’s central bank reported inflation declines.
Rouhani was voted in June last year on promise to get the country out of economic isolation, curb inflation and eliminate unemployment. Within his first hundred days of his term, he went against the grain by reaching out to U.S. President Barack Obama. He also reached a deal with Western nations over the country’s nuclear program.
Last month’s inflation rate was in line with his November promise to tame inflation to less than 25 percent by March next year.
“There’s some degree of optimism in Iran, and people are easing out of panic economic practices such as hoarding,” Sam Wilkin, a Dubai-based analyst at Control Risks Group told Bloomberg. “Still, people are hesitant, and they’re not fully confident the recent deal will lead to more comprehensive opening.”
Rouhani, who succeeded Mahmoud Ahmadinejad, inherited an economy battered by international sanctions and recession. Debts had piled up to $67 billion, despite the fact that the country earned revenues of $600 billion from oil exports during Ahmadinejad’s eight-year term.
Rouhani successfully brokered a deal with Western powers last November that unlocked $7 billion sanction relief over six months. Iran and the group of Western nations, dubbed ‘P5+1’ are expected to carry on with the talks this April.
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