TEHRAN: Iran’s inflation rate dropped to 9.9 percent year-on-year in May, down from 10.3 percent the previous month, central bank figures published on Sunday said.
"The inflation rate in the 12 months ending in the month of Ordibehesht dropped to 9.9 percent," Central Bank Governor Mahmoud Bahmani was quoted as saying in the daily Resalat. The Iranian month of Ordibehesht ended May 19.
The official yearly rate in the world’s fifth-largest oil exporter — facing more United Nations sanctions over its uranium enrichment program — stood at a peak of nearly 30 percent in late 2008.
The rate for the month ending April 20 was 10.3 percent.
Easing inflationary pressures could help President Mahmoud Ahmadinejad, re-elected for a second four-year term last year in a disputed vote, to counter criticism over enforcing a subsidy reform plan that might stoke price rises and hurt the poor.
In March, parliament passed a state budget for the Iranian year, which started on March 21, that did not contain the radical reductions in subsidies sought by Ahmadinejad. Under the plan, food and energy subsidies would be phased out over five years.
Removing subsidies could make Iran less vulnerable to any possible Western sanctions over its disputed nuclear program, but critics of the plan fear it would raise inflation.
Critics have accused Ahmadinejad of fuelling inflation with profligate spending of petrodollars since 2005, when he first came to office, pledging to share out Iran’s oil wealth more fairly.
The government blames inflation on international energy and food price rises that peaked during 2008 and points to a falling trend since late last year.
Economists say that decline is due to a slowing economy as a result of lower crude prices over the last year and the global economic downturn and also monetary tightening by the central bank.