Historic Record Set for Money Supply Growth in Iran Last Year
Iran’s Central Bank announced in its latest report a 40.6% growth in money supply last solar year, which is a record in the history of the Islamic Republic.
Money supply is the most important factor in inflation, and based on the International Monetary Fund’s assessment, Iran last year ranked after Venezuela, Zimbabwe, Sudan, Suriname, and Lebanon as having the highest inflation rate among the global community.
The Central Bank’s new report, released on Tuesday, June 8, shows that money supply reached 3,476 trillion tomans in Esfand of last year, representing approximately 40.6% growth compared to Esfand of 1398.
Money supply in the country has nearly doubled compared to Esfand of 1397.
Printing money without backing to cover government debt by the Central Bank is one of the most important factors in money supply growth in Iran.
Statistics from Iran’s Central Bank also show that government debt to the country’s banking system in Esfand of last year grew by about one-third compared to the same month in 1398, reaching close to 480 trillion tomans. Government debt to the country’s banking system has doubled over the past three years.
Beyond the government itself, state-owned companies also had close to 50 trillion tomans in debt to the country’s banking system in Esfand of last year, which represents approximately 75% growth compared to three years ago.
Official statistics from the Budget and Planning Organization, as well as reports from the Research Center of the Parliament, show that over the past two years, one-third of the government budget has been financed through borrowing.
The Central Bank has provided no statistics regarding the country’s budget situation since autumn 1397, and the Central Bank report also contains no reference to the government’s total debt.
However, the International Monetary Fund in its recent report published two months ago stated that Iran’s net government debt (including debt to the Central Bank, banks, companies, foreign debt, and others) last year was equivalent to 35.7% of the country’s total gross domestic product; in other words, Iran’s total net government debt reached 227 billion dollars, which has approximately doubled compared to 1398.
227 billion dollars in net government debt is more than 4 times the current year’s government budget even at the free market dollar rate, and more than 24 times at the official government dollar rate.
Source: Radio Farda
