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Inflation In Pictures

Most observers dismiss the government's graphs, which show moderate price rises, as off the mark.
Most observers dismiss the government's graphs, which show moderate price rises, as off the mark.
The Aftabnews website has posted two pictures of pre-sliced, packaged mushrooms made in Iran to demonstrate "the meaning of inflation for those who don’t understand it."

The price of the first package is 39,000 rials (about $4). The price of the second one, packed and produced four days later, is a whopping 10,000 rials more expensive at 49,000 rials.

Iran's official inflation rate is about 9 percent. But, as Paris-based economist Fereydoun Khavand tells Persian Letters, the real inflation rate is thought to be significantly higher.

"Some independent experts in Iran says that the country's inflation rate is about 15 to 18 percent," says Khavand, adding that planned subsidy cuts will result in a jump in the prices of consumer products in Iran.

"Different estimates, including estimates by expert sources of the Islamic Republic and also independent sources, the inflation rate could increase to 20 percent, 30 percent, or even 60 percent. The rate of 50 to 60 percent is an estimate by the parliament's research center."

The government is planning to abolish subsidies on food products such as flour and sugar as well as to gasoline and electricity that cost about $100 billion per year.

Ahead of the implementation of the plan, Iranian news agencies report that the government has started distributing cash payments in some provinces to help support families and ease the pain of the cuts. About 60 million people are expected to receive the payments, of about $40 per month.

Yet some Iranian citizens say they are concerned.

A woman in the capital, Tehran, told Persian Letters she's worried about the impact of the removal of the subsidies.

"We don't know how we will manage to make ends meet once the subsidies will be removed. Everything is already so expensive; it will get worse, I'm afraid." she said.

Reports say authorities have already stationed police forces in the capital to prevent public anger and possible riots over the rising expenses.

The implementation of the plan has been delayed several times and it is not clear when it will be put into effect.

The Kaleme website, which is close to opposition leader Mir Hossein Musavi, reported this week of "rumors" suggesting the government could further delay the the plan's implementation.

Meanwhile, some Iranians are coping with difficult times through humor and jokes -- including this one making the rounds: The Ministry of Commerce says meat has not become expensive, its price has merely changed.

About This Blog

Persian Letters is a blog that offers a window into Iranian politics and society. Written primarily by Golnaz Esfandiari, Persian Letters brings you under-reported stories, insight and analysis, as well as guest Iranian bloggers -- from clerics, anarchists, feminists, Basij members, to bus drivers.


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