On Monday, the Iranian government released monthly economic statistics that showed the official rate of inflation rising for the sixth consecutive month, to 31.5 percent. Some analysts believe the rate to be even higher.
Leading up to the New Year’s holiday, Iran’s central bank made one-time deposits of about $20 each into the accounts of more than 70 million Iranian citizens to help cover holiday expenses. The amount was nearly double the normal monthly cash handout that the state has been paying to citizens to offset a reduction in long-standing utility subsidies.
While there were not many who rejected the cash infusion, concerns that such freewheeling spending policies will actually increase inflation are growing among residents who already are restless over rising prices and their diminished purchasing power.
“I’m not an economist,” said Nazila, a 53-year old housewife in Tehran, “but what difference does this money make if the prices of food just keep going higher?” Like most Iranians who give interviews, she declined to give her last name, fearing government reprisal for speaking to foreign media.
A main reason for the price hikes is the sagging value of the Iranian rial against foreign currencies, a problem compounded by Tehran’s heavy reliance on imports. The decline is also a product of the international sanctions imposed on Iran over the country’s nuclear program.
A new round of nuclear negotiations between Iran and world powers began Friday on a discordant note in Kazakhstan, as Western officials criticized the Islamic republic for failing to respond substantively to demands that it scale back its nuclear ambitions.
In annual messages directed at the Iranian people, President Obama and Iran’s Khamenei expressed a willingness for more direct engagement between the two capitals, although Khamenei was less enthusiastic than Obama. “I am not optimistic about talks with the U.S., but I’m not opposed to them, either,” Khamenei said.
The spokesman for Iran’s Foreign Ministry, Ramin Mehmanparast, said on Wednesday, “The upcoming talks are likely to be conducted in a reasonable atmosphere which would help both sides reach a final solution.”
Joby Warrick in Washington contributed to this report.