The country is in economic trouble, and the government has made controlling inflation, preventing price increases and improving the welfare of the people its economic priority next year.
Ali Saadvandi, a macroeconomic expert, told IBNA about the government’s priorities: “These cases need an economic revolution.” Do not be afraid, you need to move towards major changes. The wrong economic policies that have been implemented for the last 50 years must finally stop one day.
In this regard, while referring to foreign exchange earnings, he said: The first point that should be considered in this regard and is considered very important, is not to include foreign exchange earnings in the rial budget. This should be provided from the monetary base, because if this happens, the rial budget deficit will be revealed.
The macroeconomic expert added: “The next point in this regard is the budget deficit.” The budget deficit should only be offset by government bonds, and in this regard, oil futures bonds and encroachments on the National Development Fund should not be considered because none of these are accountable. As I mentioned, only bonds should be issued and can be increased until the rate reaches inflation, but bond maturities should be reduced.
Saadvandi reminded in this regard: When the price of securities reaches inflation, open market operations should be started and inflation and rates should be reduced. These solutions are not difficult, but they must be done by an expert. There is no familiarity with modern monetary policy in the country and some of the problems are related to this issue.
He further stressed: “If the mentioned cases are in hand, we can hope to reduce inflation to 20% next year and then to below 5%, because as soon as these events occur, we will see good economic growth. Meaning in the economy is the cause of the lack of economic growth of the same chronic inflation, which eliminates many problems.
The macroeconomic expert went on to emphasize the existence of flaws in the budget for 1400: Of course, it should be noted that next year’s budget needs to be reformed and achieving these goals with the above budget, if not impossible, is very difficult will be. They raise an issue as a goal, but do not ostensibly consider it when writing the budget.
In this regard, Saadvandi stated: “A budget has been submitted to the parliament that all foreign currency will be converted into national currency from the monetary base, this is very dangerous because it will face more inflation next year.”