Iran inflation up 28.3 percent on year

MODEST DIP: Inflation is still soaring in Iran, but down slightly from September as it shows a 28.3 percent rise on the year in November. (GETTY IMAGES)

Inflation in Iran rose 28.3 percent in the 12 months through November, dipping from 29.5 percent in the year to September, Iran's central bank reported.

The bank did not give a figure for October in the statement published on its website.

Rising prices and the government's economic management in the world's fourth-largest oil producer are likely to be a major battleground in the June 2009 election when President Mahmoud Ahmadinejad is expected to run for a new term.

The modest dip in inflation will be welcome news to the government but it remains well above the 11 percent inflation rate that prevailed when Ahmadinejad came to power in 2005 with his promises to spread out Iran's oil wealth more fairly.

The central bank said consumer prices in Iranian cities rose by 0.8 percent in the Iranian month that ended on November 20, leading to a year-on-year rate of 28.3 percent.

Iran's year-on-year inflation rate to September had earlier been reported by media as 29.4 percent. The central bank statement put the September rate at 29.5 percent.

The average inflation rate for the year to November 20 was 25 percent, the central bank said.

Ahmadinejad has been strongly criticised by reformists and even some of his conservative supporters for overspending Iran's petrodollars, earned while oil prices and earnings soared. Crude prices have tumbled in recent months.

The president frequently tours the provinces, handing out cash or loans, and boasting victory in Iran's nuclear standoff with the West. The government has blamed global factors and Iran's "enemies" for price rises in the past.

Some independent economists say inflation is several percentage points higher than the central bank's estimate, a figure they say is based on a basket of goods that does not accurately reflect the items that most ordinary Iranians buy.

Iran, which is under UN and US sanctions over its disputed nuclear programme, has been reaping windfall gains from its oil wealth in recent years. (Reuters)

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