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The real reason for Iran's laughable behavior: Demise and Eventual Loss of Regional Power

From The Economist:

Key indicators 2006 2007 2008 2009 2010 2011
Real GDP growth (%) 4.3 4.3 4.0 3.7 3.5 3.4
Consumer price inflation (av; %) 12.0 17.0 15.5 15.0 15.0 14.8
Official net budget balance (% of GDP) -7.6 -9.7 -10.3 -10.3 -9.9 -9.3
Unofficial gross budget balance (% of GDP) 8.6 5.1 1.9 -1.2 -3.4 -3.9
Current-account balance (% of GDP) 8.1 7.8 5.6 2.7 0.1 -0.6
Commercial banks' lending rate 14.0 12.0 11.5 11.0 11.0 11.0
Exchange rate IR:US$ (av) 9,227 9,527 9,805 10,508 11,321 12,167

The government has also made a hash of monetary policy. Mr Ahmadinejad has called for a cut in interest rates to 12%. Lending rates are capped at 14% for state banks and 17% for private banks. The money and credit council, which is meant to set rates, said in April that they should not be cut this year because of high inflation and the risk of hurting private banks.

Long-term cuts are meant to help create jobs by encouraging investment in business. But with high inflation and the threat of more UN sanctions hanging over Iran's economy, most borrowers are likely to pump cash into the booming property market instead. Even if Mr Ahmadinejad decides not to insist on the cut, his intervention has further worried businessmen who think his indifference to the plight of private banks shows he is hostile to private enterprise as a whole. This week, in an unusually bold move, 50 economists castigated the president for what they deemed to be his dismal economic policies.


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Added: Sep-2-2007 
By: Hanzmaster
In:
Iran, Middle East
Tags: iran, demise, economy
Marked as: approved
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