Iran’s inflation rate fell to a two-year low in February, fulfilling President Hassan Rouhani’s vow to halt rampant increases in the cost of living. Consumer prices rose 23 percent last month from a year ago, compared with 29 percent in January and as high as 45 percent in June, according to the central bank.
Inflation rates fell in nine of the 10 subindexes tracked by the central bank, including clothing, food and transport.
Rouhani was elected in June after he promised to end the nation’s economic isolation, create jobs and slow price rises. During his first 100 days in office he broke taboos by speaking on the phone with his U.S. counterpart Barack Obama, as well as reaching an interim accord with world powers over Iran’s nuclear program. February’s data fulfills his November pledge to bring inflation under 25 percent by March 2015.
“There’s some degree of optimism in Iran, and people are easing out of panic economic practices such as hoarding,” Sam Wilkin, an analyst in Dubai at Control Risks Group, said by phone.
“Still, people are hesitant, and they’re not fully confident the recent deal will lead to more comprehensive opening.”
Iran and world powers struck an initial accord in November that broke a decadelong diplomatic stalemate, setting limits on the country’s nuclear program in exchange for about $7 billion in relief from sanctions over six months.
The deal also marks a breakthrough in relations between the U.S. and Iran 34 years after the Islamic Revolution fractured ties.
Rouhani, who took office in August, inherited an economy in recession and pressured by international sanctions, with some $67 billion in debt from former President Mahmoud Ahmadinejad’s period in office, even though the country had earned $600 billion in oil revenue during his eight-year presidency.
The so-called P5+1 group of world powers and Iran are slated to resume nuclear negotiations next month.