TEHRAN - Iran's supreme leader called on the government of President Mahmoud Ahmadinejad to work on controlling rising prices, the main gripe among Iranians who fret about inflation now running at about 26 percent. Ayatollah Ali Khamenei said the government's economic reform plan, which includes rejigging the subsidy system to involve more targeted payments, was a good step but any inflationary impact should be contained."Implementing this (economic) plan in a good manner is a big step in the country's progress but the hasty implementation of that (plan) will bring about some dangers and harm," Khamenei said in comments broadcast by state television. "If the implementation of a part of this plan creates inflation one should find solutions to prevent this issue or control its negative consequences," he said.
Inflation was running at 26 percent in July. It has climbed steadily from about 11 percent when Ahmadinejad came to power in mid-2005.
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The president in June outlined plans to overhaul the country's generous subsidy system, a move that will involve introducing more direct subsidy payments to those who need them rather than blanket subsidies on goods. The government has already curbed subsidies on gasoline via a rationing system.
Economists have said such moves will help cut state spending and curtail waste. But they also warn of a short-term inflationary impact, a sensitive issue ahead of next year's presidential race when Ahmadinejad is expected to run again.