In an interview with Radio Ghoftgoo, the member of Commerce Chamber named the exponential increase in liquidity and the devaluation of national currency as the most important reasons for rise of inflation in Iran economy.
Yahya Ale-Eshaq, the former Minister of Commerce and member of Iranian Commerce Chamber, had a phone call interview with the "Economic Dialogue" program about the economic tools in controlling inflation.
Ale-Eshaq said; “Inflation and major economic issues are not abstract, they’re rather the outcome of a set of factors and players.”
He considered the role of economic policies, political conflicts and internal relations to be effective in reducing or increasing inflation and added; “Of course, inflation may be due to the volume of liquidity, a set of monetary and fiscal policies, supply and demand imbalances in macro and micro, or the result of currency fluctuations.”
The member of Commerce Chamber also mentioned the psychological atmosphere, lack of operation, high cost of mismanagement in the supply, distribution and supervision system, lack of coordination between decision-maker and decision-director institutions in economic fields, and lack of proper structure in economic field for solving problems as other effective factors in rise of inflation.
Ale-Eshaq named the exponential increase in liquidity and the devaluation of national currency as the two factors which play the most important role in rise of inflation in Iran economy.
In his interview on Radio Goftogoo, Ale-Eshaq explained that the reason for liquidity increase was the budget deficit and accounting operations at the exchange rate; “The truth is the government revenue does not match its expenditures, and the mere solution it chooses is to change the type of exchange rate and printing banknotes which, as specified by an accounting operation, will add to several trillion in budget deficit to the amount of liquidity.”
The former Minister of Commerce criticized the type of system of supply, distribution and supervision of goods in our country; “There hasn’t been yet formed a structure to organize the system of distribution, supply and supervision and this caused a dispute between the Ministry of Industry, Mine and Trade and Agriculture-Jihad.
Ale-Eshaq continued; “Our problem is that we don’t solve economic problems with economic meters and indicators, and we tie the economy to votes and politics, so as long as the economy is connected to votes, politics, presidency, parliament etc., this will not change.”
By Mojgan Mahdavi
