An assessment of economic macro-consumption pattern and inflationary consequences of price reform

     A report called" economic macro-consumption pattern and price reform" published by Majlis Research Center

     According to circumstantial evidence, by performing o­nly price reform policy we can not be expected to see real fundamental changes, but especially the effect of this policy o­n family consumption pattern is resulted from price rise of price reform policy, economic studies office discussed. In other words, in case price rise is towards liberalization with an at o­nce boom and concludes a large part of goods and services of consumption basket, the consumption of goods will be decreased for the reason that it is impossible for them to be replaced with other goods of the same basket, it added; saying as public relations office.

     Furthermore if the scenario of targeting subsidies bill to reform energy materials price that it has been proposed by the state is taken into consideration whether this reform is gradually or at o­nce, inflation rate will be raised 48.6% and 10.5 % respectively besides base inflation.

    Also it can be predicted that at least half of $18 milliard (paid to consumers) or more probably are changed to demand with more interest in the consumption for the mentioned society (targeting subsidies) concludes seven deciles (1 to 7). Therefore, it is predicted that the inflation which is resulted from demand increase is 2.7% probably by disbursement of the first seven deciles (supposing that half of them is changed to the demand) that it can be increased to 4% with money impact multiplier.

    o­n the other hand, it is predicted that over-all consumption is increased 10.8% in 2009 than 2008 by applying price liberalization scenario that the rate will be estimated 12.2% and 3% for personal and public consumption expenditure respectively.