Stag - exit

Javad Tahmasebi/ Editor-in -chief

Once again, the new administration headed by president Rouhani emphasized exit from stagnation and recession as one of the main government priorities. This is coincident with the fact that high inflation has already strangled the economy. Since inflation in Iran originates from liquidity growth and is directly correlated with the size of monetary base, it is unwise to deal with recession through measures such as quantitative easing as practiced in some countries. Injection of a huge sum of liquidity will bring nothing but another inferno of inflation. That is why the government targeted inflation first to combat stagnation later. Recent statements by the president concerning stagnation raise hopes that the government feels relieved about the former issue. Already, there are signs indicating that the inflation is being tamed and its unleashed surge curbed. In addition, it seems that the government is determined to encounter stagnation and boost growth via other measures such as enhancement of productivity and proper orientation of existing resources. The whole economic picture is going to wipe out its blurry spots and demonstrate a brighter promising image. Perhaps, it is time to be hopeful that the perils of inflation are receding and stag-exit is going to start.