TEHRAN, July 3 Iran's inflation level fell to
9.4 percent in June, from 9.9 percent in the previous month,
its central bank governor said on Saturday.
Mahmoud Bahmani told state broadcaster IRIB that Iran aimed
to bring inflation down to between 4 and 5 percent, but he did
not give a timeframe.
Any such ambition is likely to be challenged by a phase-out
of state subsidies for staples such as food and fuel which is
due to begin in September, something which could have a
significant inflationary impact. [ID:nLDE64Q08S]
The Iranian economy also faces potential harm from a new
wave of sanctions -- from the United Nations, the European
Union and the United States -- aimed at curbing Tehran's
nuclear programme. [ID:nLDE65R1DH]
The U.S. sanctions in particular could restrict Iran's
ability to import gasoline -- for which the major crude
producer lacks sufficient refining capacity. Gasoline prices
are fixed and subsidised, but are likely to rise when subsidies
are phased out.
The success of the subsidy reform will be a major test for
President Mahmoud Ahmadinejad, who has made it one of his key
policies. A hike in inflation could be politically damaging,
(Reporting by Ramin Mostafavi; writing by Robin Pomeroy;
Editing by Sugita Katyal)