By Bijan Khajehpour for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iran Business News.
Iranian President Hassan Rouhani’s first term in office will come to an end in a few months, and it is time to evaluate his administration’s economic policies during the past four years.
When Rouhani ran for president in 2013, he promised to inject new impetus into the Iranian economy, which was suffering from eight years of misguided populist policies under his predecessor, Mahmoud Ahmadinejad, as well as from external sanctions.
Rouhani himself has recently defended his government’s economic performance, especially the fact that inflation has been contained.
One of the qualitative aspects that Rouhani pointed to was the “return of tranquility” to the Iranian economy. A quick look at some of the key indicators underlines that the government has indeed managed to improve overall economic conditions.
Inflation, which hovered around 40% in 2013, came down to 7.5% in 2016. As such, the government has achieved its own stated goal of single digit inflation. Though unofficial inflation figures (i.e., consumer price index calculations based on alternative baskets of goods) show a rate of around 10%, the fact is that inflation trends have been positive.
This achievement has been a consequence of a disciplined monetary policy, including a phased reduction of bank interests and also a better control of money supply as well as relative stability in foreign exchange rates. All mentioned factors are an indication of a more technocratic approach to economic management.
The likely realization of single-digit inflation in 2017 would mean that for the first time in three decades, Iran would experience single-digit inflation two years in a row.