Saturday, November 20, 2004

Shariatmadari: Allocating subsidies will end up fixed prices

IranMania News: " "Allocating subsidies will end up fixed prices"

Saturday, November 20, 2004 - ©2004 IranMania.com
LONDON, Nov 20 (IranMania) - Iranian Commerce Minister Mohammad Shariatmadari said that the government is likely to decide against increasing prices of certain consumer goods next year provided that the parliament fully approves the 10 bln rials the government needs for allocating subsidies.

The official told Fars news agency that if the parliament makes the funds available and gives the government a free hand to set prices of essential goods, the Khatami administration will try not to increase prices of goods above the inflation level.

"One of the most important goods that the people get government subsidies for is wheat and flour whose prices will increase slightly," he said.

The Minister added that any increase in prices of essential consumer goods would have a huge psychological impact on prices of other commodities, aggravating the inflation rate.

"As we approach the yearend (March 2005), the budget deficit worsens," he said, stressing that the heads of the three branches of the government have come to the conclusion that the key to this problems lies with the parliament.

Shariatmadari said tapping the Foreign Exchange Reserve Fund, a cut in budget for implementing developmental projects, revenues from official hard currency sales and money earned from economizing on the national budget could be used to supply funds needed for allocating subsidies."

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