to cut the budget just approved a few months ago, responding to the economic challenge posed by new Western sanctions and inflation.
“The conclusion of today’s meeting between the economic officials of the government and lawmakers is to minimize the effects of sanctions,” Economy Minister Shamseddin Hossaini said after the talks. “We agreed to cut budget spending.”
He failed, however, to say how much the budget would be reduced, thus leaving out a crucial piece of information.
The talks involved the oil, commerce and agriculture ministers as well as the Central Bank governor, the state news agency reported.
The closed meeting came amid news reports in Iran highlighting economic hardships, despite a directive two weeks ago from the Culture and Islamic Guidance Ministry ordering the media not to report on the impact of sanctions. Publishers appear to have concluded that they would lose all credibility if they ignored the obvious economic problems and so ignored the censors en masse. This has happened periodically in the past, both under the Islamic Republic and under the monarchy.
The effects of inflation could be seen in media photos of long lines at state distribution centers selling subsidized chicken, whose price on the regular market has nearly tripled in the past year.
“We don’t eat a lot of red meat because it’s not healthy. But now chicken has also become expensive. We eat chicken just two times a week and make more vegetable dishes,” one shopper, a 57-year-old woman who gave only her first name, Pouran, told Agence France Presse (AFP).
“Now, when we invite people, we have them over after dinner because everything’s become so expensive,” she said.
Inflation is officially put at 21 percent. But The Wall Street Journal last week said independent economists were estimating it at 60 percent, which would be the highest rate in the world this year.
Some Iranian officials attribute the painful price rises to government mismanagement.
Majlis Speaker Ali Larijani, for instance, said last week: “The country’s economic problems are only 20 percent due to the sanctions. Unfortunately, the main origin of the inflation comes from the maladroit application of the plan to suppress subsidies.”
The second phase of the subsidy cuts, which were to take effect at Now Ruz, have now been off until next year.