Inflation targeting; An effective measure in the country’s economy

Mohammad Reza Aram Banyar in an interview with IBNA reporter about the definitions of hyperinflation in the economies of countries said: The structure of Iran’s economy has been an inflationary structure whose main root is in the budget deficit of governments. It can be said that about 70% of inflation is related to the budget deficit and 30% is related to sanctions and other factors.

He added: “The main root of inflation is related to costs and how the government manages expenditures.” This structure has been inflationary over the years, but in economics there is a ratio called the ratio of monetary and financial assets to physical assets.

Aram Banyar pointed out: ‌ Iran is a diverse country in terms of assets and reserves. The ratio of monetary and financial assets has never been equal to 100% of physical assets, and in practice in our country, hyperinflation never occurs structurally. The most important indicator of hyperinflation is the ratio of financial assets to physical assets, which is less than one, and in countries where this ratio is more than three or four, it can be said that their economies are involved in hyperinflation.

Emphasizing that Iran is not a single product country, he said: مختلف Various mineral and oil resources are widely produced in the country, and if these conditions did not exist, Iran’s geographical location and the ability to have corridors and connections to the north and south of the world. . Due to the huge volume of oil and gas resources, the volume of water and the possibility of producing food products and the variety of mineral and industrial products, in practice, there is no possibility of hyperinflation.

The expert on economic issues pointed out: ‌ The root of high inflation in Iran is the annual government budget deficit of 70% and international debates such as sanctions by 30%. If the inflationary effects of the government budget deficit are properly managed, it will be much easier to impose the percentages resulting from the sanctions and reduce its role to a minimum.

He clarified about inflation rates above 50% and the question of whether they can be defined as hyperinflation: این These inflation rates are not called hyperinflation. Hyperinflation is a continuous inflation rate of several hundred percent that is not possible in the Iranian economy.

Regarding the central bank’s goal of reducing inflation to 22 percent, Aram Bonyar said: “Definitely one of the ways to manage inflation is to reduce it, and these goals are done all over the world and in developed countries; Because inflation is one of the most important economic factors in any country.

The expert on economic issues pointed out: ‌ Mismanagement and good management is one of the factors affecting the inflation rate, so this goal setting is very important and determines the direction of the actions of the government and ministries such as the Ministry of Silence.

He continued: “Because the central bank alone can not be effective in managing liquidity, all government institutions and even the people must act in concert to control the amount of liquidity, but in general, targeting inflation is an important and effective measure in the country’s economy.”