Iran central bank governor says inflation rate rose to 14 percent: IRNA

IRNA quoted Bahmani as saying that inflation for the month of Farvardin, which ended on April 20, would be around 14 percent.

He dismissed forecasts that prices will soar during the current Iranian month of Ordibehesht, which began on April 21.

Inflation has risen steadily since hitting a 25-year low of 8.8 percent in August and some economists say it could accelerate following government moves to slash subsidies on essentials like food and fuel.

President Mahmoud Ahmadinejad’s government started implementing the subsidy reform plan in December, calling it the biggest “surgery on the economy” Iran had ever experienced. The first phase of the plan eliminates $20 billion of subsidies on food, gasoline, electricity and natural gas.

The semi-official Fars news agency reported Bahmani said inflation could return to single digits once reforms to subsidies are completed, although he did not specify a date.

“By the completion of the subsidy reform plan the inflation rate would definitely become one-digit again,” Fars quoted him as saying. “The implementation of subsidy reform plan is under way, and … as we get close to its completion, it is natural that the inflation rate decline.”

Iranian consumers have seen gasoline prices rise seven-fold and utility bills soar following the start of reforms.

Ahmadinejad has denied the policy will lead to inflation and economic hardship and says poorer Iranians will be net beneficiaries thanks to direct subsidy payments.

Some Iranian clerics and lawmakers have accused the government of publishing false figures, saying inflation is much higher than officially stated.

Iran’s economy is facing hardship because of sanctions imposed over its disputed nuclear program, which many countries fear is a cover to build bombs. Iran says its nuclear work is aimed at generating power to meet booming demand.