Online news: The economic performance of the government and the increase in prices It has been accompanied by criticism from politicians and some MPs. As some experts warn about the economic resilience of the people, they emphasize that the capacity of resilience and tolerance of the people has a limit and care should be taken that this capacity is not filled.
In this regard, Hossein Samsami, the representative of Tehran in the Islamic Council, in an interview with Khabar Online, referring to the increase in the price of basic and consumer goods in the country, first examined the price changes in the period of 9 months of December 1404 to Mehr 1405 and said: During this period, the price of Bahar Azadi coin went from about 120 million tomans to 258 million tomans, which shows an increase of 115%. Also, the price of the Quick car at the factory has increased from 516 million tomans to 1.64 million tomans and has increased by 106%.
He continued: The price of the refrigerator has increased from 32 million tomans to 125 million tomans, which shows an increase of 280%. The price of each kilo of foreign rice has also increased from 144 thousand tomans to 309 thousand tomans and has grown by 115%. The price of red meat has increased by 104%, chicken by 87%, pasteurized milk per liter from 65,000 tomans to 139,000 tomans, equivalent to 113%, and eggs by 149%.
When the price of currency increases, the price of basic goods and raw materials also increases
Asking the question of what is the reason for such increases, this member of parliament stated: If we look carefully at the statistics, we can see that the official exchange rate in the exchange hall went from about 71 thousand tomans to 176 thousand tomans and now it is about 189 thousand tomans; That is, it has increased by 135%. The exchange rate in the open market has also increased from about 130 thousand tomans to 260 thousand tomans.
Emphasizing that the main reason for the increase in the price of goods is the growth of the exchange rate, Samsami clarified: Statistics and economic facts show that the reason for the increase in the price of these goods is the exchange rate. When the price of currency increases, the price of basic goods and raw materials also increases. The exchange rate of the exchange is the basis of pricing in our commodity exchange, and when this rate increases, the cost of production and supply of raw materials also increases.
Pointing out that liquidity is also influential in inflation, the member of the Economic Commission said: contrary to the idea that some people put forward and consider liquidity to be the main cause of inflation, in the same period of 9 months, the growth of liquidity was 43%, but the actual liquidity was recorded as negative 18%.
In the last one year, the government imposed over 100% inflation on the society and is doing the same thing again
This representative of Tehran in the parliament further criticized the performance of the government in managing the foreign exchange market and said: In my opinion, the government has not yet realized what is the main reason for the increase in prices. The document of this claim is also the performance of the government and the decisions it has taken in the field of foreign exchange policy.
Referring to a letter from the Ministry of Security to the Central Bank dated 29 October 1405, Samsami explained: In this letter, it is stated that only 66 items of goods can supply their currency through the exchange hall and other goods must be supplied with free exchange rates. The meaning of this decision is that 66 items of goods can get the currency they need at the rate of the exchange center, which is about 189 thousand tomans, but other goods must get the currency they need at the rate of 260 to 270 thousand tomans and reach an agreement with the exporters.
He added: The meaning of this decision is that almost 50% of the currency needed to supply the raw materials of production, some basic goods and capital goods will be provided at a higher rate. It is normal that in one or two months, 50% inflation will be added to the existing inflation. Therefore, when I say that the government does not know what is the cause of inflation, that is the reason why it imposed over 100% inflation on the society in the last one year and is doing the same thing again. When we ask the government why they are doing this, they say we don’t have currency. When you don’t have currency, why do you tell importers to go and buy currency directly from exporters?
Pointing to the problems of returning the exported currency, Samsami said: When the non-oil exporter is told to bring his currency to the exchange center, he says why should I offer the currency at the rate of 189 thousand tomans, while it is priced at 260 thousand tomans in the open market? Therefore, it refuses to supply currency.
The parliament has not presented a plan to deal with this price increase
The member of the Economic Commission continued: The exporter should be told what it means to sell the currency more expensively. This action ultimately means financing the increase in currency prices from people’s pockets; Because this currency is supposed to be used for the import of basic goods and raw materials, and when its rate increases, the cost of production also increases.
Criticizing this approach, this member of parliament said: Mr. Exporter, haven’t you produced with the soil of this country? Have you not produced with the water, electricity and gas of this country, which has been provided to you at a subsidized rate? Have you paid your labor at the price of free dollars and now you want to supply your currency at a free rate? What is this injustice that we do to people?
Stating that this policy is a great injustice to the people, he added: Unfortunately, the Central Bank also follows this policy, and the parliament, except for one or two representatives, has remained silent against this price increase. The parliament has not presented a plan to deal with this price increase.
We can contain the price rise and not allow the prices to rise further
In response to a question about the level of resilience of the people against economic pressures and the possibility of social unrest in the event of continued high prices, Samsami said: If the people have endured these conditions so far, it is because of their interest in the country and their revolution, but the resilience of the people also has a limit and there is a threshold for it. We should not forget that the protests started in the beginning of January 1404 in the Tehran market and the tragic events of January 18 and 19 had economic roots. The increase in the exchange rate was one of the factors that created this situation.
This member of parliament warned: If we want to continue this process, we may bring the country to a threshold where events will happen that no one expects. Very bitter incidents may occur in the country, which will also have security effects.
At the same time, the member of the Economic Commission emphasized that it is possible to prevent the recurrence of such incidents and said: We can prevent these incidents. We can contain the price rise and not allow the prices to rise further. It is not meant to reduce prices in the short term, but at least we can prevent further price increases; Among the increases that are going to happen in the next one or two months.
In response to the question whether the parliament has a plan to manage the economic crisis and control inflation, Samsami announced the presentation of a plan titled “Rial sovereignty and currency governance” and said: “We definitely have a plan for this situation.” Just today, I uploaded the rial governance plan and currency governance. Before this, about a year and a half ago, I had uploaded the plan to strengthen the national currency in the legislative system, which if it was approved and implemented by the government, these events would definitely not have happened.
In the current situation, what has a very high weight in inflation is the increase in the exchange rate
Referring to the economic effects of the war, he clarified: We agree that the war has damaged the infrastructure, increased the cost of transportation and the cost of production, and we accept all these things, but each of these factors has a specific share and weight in the finished price. In the current situation, what has a very high weight in inflation is the increase in the exchange rate; However, the government continues to follow the same path with wrong policies and wrong arguments.
Criticizing some people’s positive evaluation of the government’s economic performance in the economic blockade, this member of parliament said: In my opinion, the government’s economic performance has not been good; Because the government is managing the situation by increasing the price of goods. This increase in price has greatly reduced household consumption. The consumption of chicken and other goods has decreased and people’s living expenses have increased.
Samsami considered the decrease in people’s trips as one of the consequences of the increase in costs and added: One of the reasons for the decrease in gasoline consumption is the increase in travel costs. Right now, the cost of tires, oil, depreciation and car repair has increased so much that people can no longer afford to use cars. The cost of oil change has reached 6 to 9 million tomans and the price of tires has also increased several times.
The events of 18 and 19 may happen again
Samsami emphasized: When prices increase by more than 100%, it is natural for people to consume less and use their facilities less. If the government wants to manage the situation with this method, this is also a form of management, but it should be noted that this type of management only responds to a certain extent, and if it exceeds that limit, bitter things may happen in the country.
In response to the question whether there may be unrest again, he said: Yes, the events of 18 and 19 January may happen again. The same events that Tehran marketers protested at the beginning of January, these protests turned into riots and a relative calm was established, and then the events of January 18 and 19 occurred. We cannot say that these incidents did not happen, but we can manage the increase in prices so that these incidents do not happen. Of course, the prices cannot be reduced, but in the short term, we can stop the price increase. We implemented a series of policies, the effects of which will be known in a month or two, while what exists now is because of the policies that have already been implemented.
In the end, referring to the rial governance plan and foreign exchange governance, he said: This plan was presented for this purpose, to determine how we can manage the situation. If the parliament approves it and the government implements it, it can definitely prevent many things that may happen in the future and also prevent further price increases.
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