Iranian president targets stagflation in first budget

Tough economic sanctions and fiscal mismanagement led to a soaring inflation over the past few years

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Iranian president Hassan Rowhani said tackling inflation and boosting growth were the country’s economic priorities as he presented an austerity budget, his first, to parliament on Sunday.

Inflation has soared in the last few years, and trend analysts say is due to increasingly tough economic sanctions and fiscal mismanagement by former president Mahmoud Ahmadinejad.

“Employment is the most important future issue for the economy but now the biggest problem is (tackling) stagflation,” Rowhani in a live address on state television.

“The combination of stagnation and inflation over the past two years was unprecedented,” he said.

Iran’s budget for the year starting in March 2014 tops $66 billion, calculated on an open-market exchange rate.

Ahmadinejad’s budget last year amounted to about $200bn but was amended in October because the government said it was unable to fund it.

Iranian media reported last week that the 2014 spending assumes an average oil price of $100 per barrel, about $10 below benchmark Brent crude prices.

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