Iran’s economy will soon become the next Venezuela

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Late last week, Ebrahim Raisi, who will take over as President next month, held a meeting with the regime’s economists, from which economist Massoud Nili’s short speech was the most alarming.

He drew the attention of the participants to the imminent formation of hyperinflation in Iran and said that uncontrollable inflation is on the way.

A few days after the meeting, the Central Bank published a report on the state of monetary indicators in 2020, which focused on the unprecedented growth of liquidity.

It was after this report that Massoud Khansari, the head of the Tehran Chamber of Commerce, tweeted about the growth of liquidity and wrote: “According to the statistics of the Central Bank, the amount of liquidity has exceeded 3700 trillion tomans and has doubled compared to two years ago.”

He warned: “However, in recent months, has been warned of the consequences of rising liquidity on the economy and inflation, but nothing happened. With this trend, the government will face inflation in the coming months that has never been experienced in the country.

The story was not limited to this, and this time another warning report was published which showed that, contrary to what Hassan Rouhani imagined, Iran is now closer to the situation in Venezuela than ever before.

On March 17 last year, Rouhani said that the prediction of many experts, including economists, in 2018 was that Iran’s inflation would reach three digits by the end of the year.

He continued: “They interviewed about this and wrote in the newspapers and said that Iran’s inflation will be in triple digits and becomes Venezuelan.

“If we did not work hard, we might have faced such a situation, but what the government did in 2018, when we entered 2019, was to control inflation almost from the end of spring and start reducing it.”

He attributed the cessation of this trend in late 2019 due to the expansion of the coronavirus and said that if it were not the coronavirus, we would definitely have had better conditions.

Meanwhile, Abdul Nasser Hemmati, the former head of the Central Bank, who had entered the race for the presidency, repeatedly mentioned in his propaganda interviews that he had prevented Iran from becoming another Venezuelan.

Now, however, the reports of 2020 reveal frightening facts. Following the release of the unprecedented growth of liquidity, the Statistics Center has published a report showing that the inflation of imported items in the winter of 2020 was recorded in triple digits and 558 percent.

This is in a situation where the US dollar rose more than 60 percent last year against the Iranian rial. Simply put, the price of items imported from abroad has increased 6.5 times in one year.

According to Trading Economics, Venezuela with inflation of 2719.50%, Sudan with inflation of 363.1%, and Zimbabwe with inflation of 194.07% in April is now the three most inflationary countries in the world.

Meanwhile, Venezuela, once known as Latin America’s Kuwait, became current Venezuela in a few years.

Venezuela was sanctioned by the United States despite its vast oil resources, fell into the Venezuelan cycle due to a heavy budget deficit, and then borrowing from foreign countries, especially China.

In 2015, Venezuela recorded the highest inflation rate in the world with an inflation rate of more than 100%, and then in 2016 the country’s inflation rate reached 700% and in 2017 it reached nearly 2000%.

The main cause of hyperinflation in the country has been the government’s budget deficit due to declining oil revenues and unplanned support schemes, which have forced the government to print more money to cover its expenses.

Although inflation was initially limited to between 10 and 30 percent, it was not long before Venezuela’s economy collapsed.

Source » irannewsupdate

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