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Overview: Iran Analysis Weekly Report September 04, 2016

04 Sept., 2016

Vistar Business Monitor

According to the latest data released by the Central Bank of Iran (CBI), the average inflation rate continued to fall in the 12 months to the Persian month of Mordad (fifth month of the fiscal year, July 22, 2016 – August 21, 2016), reaching 8.7% -- down from 9% in the 12 months to the fourth month of the year, Tir (June 22, 2016 – July 21, 2016). However, the year-over-year inflation increased to 7.4% in Mordad from 6.5% in Tir. Since a few months ago, the falling inflation trend has changed, signaling that the government has been facing challenges in its attempt to retain its achievement -- single digit inflation.

First Vice President Eshagh Jahangiri announced that the “first phase” of the National Information Network has been implemented. The National Information Network is a planned independent intra-net that will be only accessible from within Iran. Minister of Communications and Information Technology Mahmoud Vaezi claimed that the network is aimed at creating “better service, faster speeds, and more security” for Iranian users. Researchers, however, have contended that the creation of the National Information Network will also facilitate state monitoring and censorship of internet traffic within Iran.

Iranian news outlet Memari News published a report accusing Tehran Mayor Mohammad Bagher Ghalibaf’s office of giving government officials “huge discounts” on government-owned property. Tehran City Council Head Mehdi Chamran denied the reports and intimated that a “particular political party” was behind the allegations, likely a reference to Iran’s reformists. IRGC-affiliated news outlet Tasnim News Agency claimed that the reformists implicated Ghalibaf as part of a larger effort to destroy him as a frontrunner in the 2017 presidential elections. Ghalibaf came in second place to President Hassan Rouhani in the 2013 presidential elections and was also a candidate in the 2005 elections.

The managing director of the National Iranian Oil Company, Ali Kardor, announced that Iran will invite foreign oil companies to submit investment bids in October under the Iranian Petroleum Contact (IPC), Iran’s new oil and gas contract model. The Rouhani administration has been forced to revise the IPC several times after opponents claimed that the proposed model gave international oil companies an unconstitutional level of control over oil development.
Atomic Energy Organization of Iran (AEOI) Head Ali Akbar Salehi announced that Iran and Russia will begin constructing two nuclear reactors in the southern city of Bushehr on September 10. Salehi claimed that the two reactors will save Iran approximately 22 million barrels of oil per year. In 2014, Moscow and Tehran signed an agreement to construct up to eight new nuclear reactors in Iran after Russia completed its work on Iran’s first nuclear reactor in Bushehr in 2013.

Parliamentarian Mohammad Reza Aref, the head of the reformist-moderate “Hope” coalition, criticized President Hassan Rouhani’s administration for failing to fully implement its “slogan of change” in government. Reformists and supporters of Rouhani formed a coalition during the spring 2016 parliamentary elections, but the alliance is reportedly under pressure. Former reformist President Mohammad Khatami complained to Rouhani that his supporters have not “kept their promises” to reformists after the elections, according to a reformist leader who also warned that not all reformists may support Rouhani in the 2017 presidential elections as they did in 2013.

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