Managing Expectations Has Been the Most Important Action of the Government

A significant portion of economic notes and analyses published in Iranian publications this week, on the occasion of the second anniversary of the 11th presidential election, focused on critiquing and reviewing the economic performance of Hassan Rouhani's government. A summary of several analyses and notes published is presented below: Managing Expectations. Mosi Ghaninejad, an economist, has attempted to evaluate the performance of this government in a note written for the Donya-e-Eqtesad newspaper, just before the second anniversary of the 11th government. According to this university economics professor, "A review of the economic performance reveals that perhaps the most important economic action of the government in controlling the markets was managing expectations, which led to the automatic control of prices in many markets." This economist stated, "What this government did was not extraordinary; it was merely avoiding the actions taken by the 9th and 10th governments and managing the optimism of what was happening in society, preventing things from falling apart." Mosi Ghaninejad emphasized in this analysis that "the most important policy that the government has pursued over the past two years is resolving the nuclear issue and getting the economy out of sanctions and shortages." He believes that there is a lack of coherence in some recent decisions made by the government's economic team, citing instances such as the directive to stabilize commodity prices, the arbitrary determination of bank interest rates, changes in energy carrier prices, and the stabilization of currency prices as evidence. Ghaninejad believes that "what should be more focused on by officials and economic policymakers is how to manage expectations after reaching an agreement and controlling demand." Acceptance of Criticism Prevents Confusion. Mohammad Taghi Fazel Meybodi, a member of the Society of Researchers and Teachers of Qom Seminary, has pointed out issues regarding the performance of the 11th government, including its economic performance, on the occasion of the second anniversary of the 2013 presidential election and Hassan Rouhani's victory in that election. In this note published by the Shargh newspaper, Fazel Meybodi, referring to the obstacles and limitations faced by the government as well as the performance of the previous government, stated that "placing the blame for all of Dr. Rouhani's unfulfilled promises solely on him is certainly incorrect and unprincipled." He also emphasizes that "in some cases, the government has been unable to fulfill its slogans due to its internal weaknesses." Fazel Meybodi believes that "accepting part of the criticisms, especially in the economic and domestic policy areas and explaining the reasons for their occurrence, has a more favorable effect on public opinion and prevents some confusions or misunderstandings from arising." This member of the Society of Researchers and Teachers of Qom Seminary writes in his note that "the complaints of producers about market stagnation, although not negating the President's statistics regarding the government's efforts to exit the strange phenomenon of stagflation left over from the previous government, are nonetheless a concern for industrialists due to their negative impact on domestic production, reduced cash flow, and renewed inflation." According to Fazel Meybodi, despite the limited constraints and difficulties, the government has done significant work in the past two years; however, he also believes that the government's responses to performance criticisms should include some "internal critique" to be more "effective." This member of the Society of Researchers and Teachers of Qom Seminary believes that the reverse performance of state media in dealing with the 11th government cannot justify the market, professions, classes, and activists in various fields. Fazel Meybodi emphasizes that "the current atmosphere definitely needs changes." Stopping Oil Money Injection: A Solution to Inflation Problems. Hadi Haqshenas, an economic analyst and former member of the Islamic Consultative Assembly, in a note written for the Etimad newspaper published in Tehran, describes inflation as "a significant problem" in the current Iranian context. According to this economist, "one of the side effects of inflation is that it sends a false signal to investors." "Increasing class disparity" is another problem that Hadi Haqshenas names as a consequence of inflation in the economy, "because it causes those with fixed salaries to continuously regress in terms of their living conditions." The third side effect of inflation, according to this economic analyst, is the "permanent and continuous decrease in the value of the national currency, which leads people to seek to convert their money into goods." Hadi Haqshenas also considers solving the inflation problem to be associated with high costs, which, according to him, forces governments to overlook this "difficult surgery." This former member of parliament, referring to the decrease in the inflation rate from over 40% to around 15% during the 11th government, describes this rapid decrease in inflation as "mainly due to the government's financial discipline, the central bank's discipline, and reduced political tensions," but believes that from now on, the government "must move towards fundamentally solving this problem." He attributes the impact of the "hard core of inflation" on the Iranian economy to the "injection of oil money into the economy" and states: "The injection of oil money into the economy must be stopped." According to Hadi Haqshenas, "if the government also engages in real privatization alongside its anti-inflation policies, not only will production and productivity increase, but the problems related to recession will also decrease." This economic analyst believes that "it is a wrong perspective that some think that moving towards exiting recession necessarily leads to inflation."