The increase in food prices accelerated in Iran in September, when the cost of a basket of 45 staple food items showed a mighty leap of nearly 50 percent from the same month a year earlier, the Kargozaran newspaper reported last week, citing central bank figures.

For the three Iranian months of Tir, Mordad and Shahrivar (July to September), year-on-year food price inflation was 28.98, 40.08 and 48.46 percent respectively, taking the average increase for the summer period to 39.2 percent, the daily said.

Many economists have accused President Mahmoud Ahmadinejad of directly fuelling the price rises by plowing huge amounts of cash into the economy to fund local infrastructure projects and small production units.

In spite of efforts by the central bank to shrink the excessive volume of loans, analysts say the government has already injected so much oil money into the economy that inflation will remain high for months and years to come.

Ahmadinejad last week replaced the head of the central bank, Tahmasb Mozaheri, in a bid to bring more harmony to his economic team around his expansionary policies [See next news item]

Agence France-Presse - 28 September, 2008

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