Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Ahmadinejad has just implemented transfers that seem to be on the level of the minimum wage, called "economic jihad" by The Economist.
The government cleverly doled out two months' worth of family cash transfers, amounting to some $90 per person, before unleashing its shock. When the first tranche of price rises hit, quadrupling the cost of some kinds of bread and shooting diesel prices up by 2,000%, among other things, there was barely a peep from the public. Iranians have rapidly got used both to paying a lot more for some things and to having more money to spend as they wish. A family of five now pockets monthly sums close to Iran's minimum wage, enough to pull a big proportion of the 10% of Iranians who live on less than $2 a day above that bar. Yet tight controls on the money supply have kept inflationary pressure lower than feared. By some counts it has already fallen from an annualised 20% in March to 14% in May. With government finances now in better shape, that may drop still further, and quickly.
by gk (gk (gk quattro due due sette @gmail.com)) on Tue Jul 23rd, 2013 at 06:11:54 AM EST
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