TEHRAN (AFP) — Iran expects to reduce its soaring inflation to around 22 percent by the end of the calendar year in late March, the central bank chief was quoted as saying by Sarmayeh economic daily on Sunday.

“Given that plans were made to increase production and to supply goods proportionate to demand, the central bank believes inflation will return to 22 to 23 percent by the end of the year,” Mahmoud Bahmani said.
The central bank said the year-on-year rise in consumer prices, which peaked at 29 percent in late September 2008, had eased to 26.4 percent in the Iranian month of Azar that ended December 20.
Central bank officials have cited growth in the country’s money supply as the prime factor for the surge but they have also partly blamed them on increased global prices.
Meanwhile Iran’s commerce minister Masoud Mir-Kazemi ordered importers and manufacturers to slash prices amid falling global figures and threatened to penalize businesses which fail to comply.
“Violators including the representatives of foreign firms in Iran and domestic producers, will be fined if they do not balance prices and if the offence persists they will lose their business permits,” he warned.
“Iran’s trade is not 100 percent competitive and the high tariffs easily create a temporary monopoly,” Mir-Kazemi was quoted as saying by Sarmayeh.
The minister said the Consumers and Producers Protection Bureau would oversee “the balancing of prices in the domestic market in proportion with global falls.”
Analysts say the government has already injected so much oil money into the economy that inflation will remain high for months and years to come despite the central bank’s efforts to shrink the excessive volume of loans.