TEHRAN (Iran News) –Possible inflationary trends in the short-term. In its recent report, the IMF predicted 36.5 percent inflation for Iran this year. For further discussing possible scenarios for possible inflationary trends in the short-term; we’d asked professor Hanke for a commentary.
Steve H. Hanke is a professor of Applied Economics at Johns Hopkins University and is the world’s expert at measuring hyperinflations.
The IMF’s forecast of 36.5% is credible
Asked about whether the inflation rate will be around this level or higher than this prediction, Hanke said, “I measure Iran’s inflation rate every day. Today, the annual inflation rate is 58% per year. I do not make inflation forecasts in countries with elevated inflation rates, like Iran. But, given today’s annual inflation rate of 58%, the IMF’s forecast of 36.5% is credible.”
What are the main reasons for high inflation in Iran?
According to Hanke, The main reason for high inflation is a combination of excessive money growth and lack of confidence in the ever-depreciating Iranian rial.
The JPOCA and inflation rate
In recent days, new rounds of talks have been started between Iran and world powers in Vienna. Both parties announced that some progress has been made and there is a possibility of lifting sanctions. Answering about whether we Can expect a reduction in the inflation rate if the JPOCA revives, Professor Hanke responded, “The inflation rate will depend on the policies of the central bank and the confidence Iranians have in the rial. If the JPOCA is revived and confidence is restored, it might allow for a set of policies that would result in a lower inflation rate”.