According to Fars News Agency the Central Bank of Iran reported a 15.6% increase in the goods and services Consumer Price Index for urban areas in the 12-month period ending July 22, which marks the end of the fourth Iranian month Tir, over the same period of last year. The figure indicates year-on-year increase of 14.2% compared with the similar month of the previous year. The overall index (using 2011 as the base year) stood at 224.7 during the month, indicating a 0.4% decline compared with the previous month, IRNA reported. This is while the Statistical Center of Iran on Saturday reported an inflation rate of 14.1% for the twelve-month period and year-on-year increase of 12.8% in price index compared with the similar month in the previous year. We believe in Behgozin, that the reasons for the decline in inflation is the following items:
- Central Bank monetary policy contractions:
Since 2014, the Iranian government seeks to reduce the inflation in different parts of the economy, and the program is looking to absorb liquidity by raising interest rates. That is why the government allowed the banks to raise interest rates, up to 24% and by implementing this policy, 98% of liquidity was absorbed by banks.
- Expectations of an increase in the supply of goods:
With regard to the political agreements made at the international level and facilitation of international trade, many people have postponed their demand. Because the dollar price reduction is expected and people are waiting to buy imported goods at lower prices.
- Increase in GDP
According to facilitation the process of production of goods and also to increasing entry of foreign products slight decline in prices occurred in the supply side.
- Reducing inflation expectations
By creating conditions for political stability and economic recovery, inflation expectations and uncertainty about the fate of political and economic decline.
According to the above-mentioned what the government has pursued was the goal of reducing inflation, which caused the recession in the economy. for this reason the governor Central Bank of Iran said, Unfreezing billions of Iranian cash by the sanctions relief, following the July 14 deal the country clinched with world powers in Vienna, will not cause any economic shocks or inflation in Iran.
In other side Iran will have at least two percent of economic growth in the first year following the removal of economic sanctions against the country subject to a possible nuclear deal and for this reason, it is predicted that the inflation rate in Iran is not increasing and is even declining.