Page last updated at 09:09 GMT, Friday, 17 October 2008 10:09 UK

Economic headache for Ahmadinejad

President Mahmoud Ahmadinejad
Ahmadinejad came to power in 2005 with a pledge to fight corruption

Iranian president Mahmoud Ahmadinejad is often seen in the West making fiery pronouncements about his country's nuclear programme and lambasting world powers for their "arrogance" and "imperialism".

But much like his US arch nemesis George W Bush, Mr Ahmadinejad has faced growing criticism at home over his economic record. Newspapers are dominated by stories of soaring prices and high unemployment, with some pointing the finger of blame at the president's populist policies.

With less than a year to go before the next presidential election, discontent over the economy could harm Mr Ahmadinejad's chances of securing another term in office.

Economic policy

Mr Ahmadinejad came to power in 2005 with a pledge to fight corruption and defend the interests of Iran's poor.

Population: 71.5 million (2007 estimate, Central Bank of Iran)
Urban population: 49.6 million (2007, CBI)
Economically active population: 23.5 million (2006 estimate, CBI)
GDP: 294.1 billion dollars, (2007 US estimate)
Unemployment: 9.6%, rising to 20.3% among people under 24 (spring 2008, CBI)
Inflation: 29.4% (August-September 2008, CBI)
Oil production: 4.4m barrels per day (2006, IMF)

Soaring oil revenues have helped in this regard, with government measures such as cheap loans for small businesses, as well as generous subsidies on petrol and food.

Despite widespread public debate over economic policy, there is no single official document setting out the government's economic objectives.

It is now considering a so-called "Economic Transformation Plan", which will be put before Iran's parliament, the Majlis. The hope is that it will reduce government subsidies (especially on energy), give more freedom to the private sector and reduce the country's reliance on oil revenue.

There has been consistent criticism of government economic policy from Iran's pro-reform political parties.

In September, Mosharekat, the party of former President Mohammad Khatami, said that "despite mythical levels of oil revenue, Iran's economic status has been in decline".

Closed shops in Tehran's Bazaar
A survey in Tehran showed big fears over the high prices

It added that "the class gap has increased, the lower and middle classes, particularly labourers and public sector workers, have been hurt and the development of infrastructure has suffered".

Another opposition party, the Organisation of the Mojahedin of the Islamic Revolution of Iran (OMIRI), has accused the government of "unwise and destructive" policies, and also blamed Mr Ahmadinejad's "aggressive" foreign policy for bringing international sanctions upon the country.

Meanwhile, the man who holds ultimate power in Iran, Supreme Leader Ayatollah Ali Khamenei, has given only guarded support to Mr Ahmadinejad's policies. In August, he told the president to be "cautious" and avoid any "hasty behaviour" regarding the economy.

Public opinion

But how do ordinary Iranians feel?

Due to restrictions imposed on the media, little is known about the level of discontent in the private sector or among trade unions. But other indicators, such as opinion polls and readers' letters to newspapers, suggest that the economy is priority number one.

Most serious problems:
Inflation and high prices: 90%
Housing: 83%
Unemployment: 78%
Insufficient income: 72%

Survey: 1,223 people questioned in 30 districts of Tehran

A study carried out for the Iranian parliament in June asked people in Tehran what they considered to be the "most serious social problems" in the country.

Some 90% felt that inflation and high prices were a big problem. Housing and unemployment were also major concerns.

Mr Ahmadinejad has frequently railed against Western "pressure" and the sanctions imposed on Tehran over its nuclear programme.

The same survey asked people whether they thought these were to blame for Iran's economic difficulties. A total of 32% said yes, while 29% disagreed.

BBC Monitoring selects and translates news from radio, television, press, news agencies and the internet from 150 countries in more than 70 languages. It is based in Caversham, UK, and has several bureaux abroad.

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