AFP, Tehran :
Iran’s President Hassan Rouhani was elected on hopes that he could revive the country’s sanctions-neutered economy, but the public’s goodwill towards him is showing the first signs of fading.
Having raised expectations of more moderate rule and wider engagement after eight years under the acerbic leadership of Mahmoud Ahmadinejad, Rouhani has established a cautious detente with the West since taking power last August.
At home he has started to slow the inflation rate that stemmed from his predecessor’s spending programmes which, though meant to keep the economy going as Iran became more isolated because of sanctions, ultimately deepened its difficulties.
His tenure has so far been played out mostly on the world stage over the chances of a deal to end global suspicion of Tehran’s nuclear activities, but domestic pressures are now growing.
Although there is a general acceptance that prospects for economic growth are positive under Rouhani, Iranians are being squeezed and they speak of being no better off now than when he took charge.
“It’s just the same,” said Nahid Pakmiat, a retired university administrator, as she bought groceries in Ali Abad, a lower-middle class area of southern Tehran.
Most sanctions remain in place and the economy is still in recession.
But no matter how tough the medicine, Rouhani’s cabinet appears determined to pursue major reforms, including an overhaul of state subsidies for electricity, fuel and basic foods, which will hit the poorest people hardest.
“There is a huge gap in society. The high costs mean the poor cannot afford meat, chicken and other goods that are considered essential to Iran’s middle and lower-middle classes,” said Pakmiat, 55.
Petrol prices were hiked by as much as 75 percent on Friday, despite confirmation of the general hardship two days earlier when 95 percent of Iranians signed up for state aid, ignoring a government campaign that urged people to forgo the handouts.
Annual inflation currently stands at 34.7 percent, according to the Central Bank — 5.7 percentage points down from 12 months ago.
Despite the immediate impact of subsidy cuts, analysts say austerity measures are necessary after the previous economic mismanagement.
