The increase in electronic voucher credit to 300,000 to 500,000 Tomans is presented as an economic measure in response to rising inflation and decreasing household purchasing power. This decision is considered a necessity to maintain the minimum livelihood of the lower income deciles of society, while fundamental challenges in securing financial resources and matching the existing inflation persist.
Implementation Challenges of Increasing Voucher Credit
The President and government spokesperson have announced that the implementation of this plan will begin in mid-October, but experts point to a significant gap between the percentage increase in credit and the current inflation rate. From January 2021 to the end of August 2023, food inflation has reached about 84 percent, and overall inflation has reached 61 percent. While the current voucher credit is one million Tomans, this new increase can only partially compensate for the shortfall in household budgets.
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Financial Burden and Resource Imbalance
Another challenge associated with this plan is how to finance it. If this increase is considered for a population of 52 million (the first six deciles), it creates a new financial burden of about 16 trillion Tomans (16 billion) per month. Currently, the voucher plan is facing a resource and expenditure imbalance, which will reach the threshold of 30 billion, raising questions about how to cover this financial gap.
Experts' Opinions on Resource Provision
Experts have two views on financing this plan. The first view, which focuses on non-inflationary financing, warns that if the budget deficit is covered through borrowing from the central bank or money creation, its supportive effects will quickly be undermined by inflation. Conversely, some analysts suggest that under current conditions, charging the voucher can also be possible through temporary money creation, provided the government adheres to financial discipline and cuts current expenditures.
Ultimately, the increase in voucher credit as an economic measure in the current state of the country requires precise planning and sustainable resource provision. The success of this plan depends on the government's ability to manage finances and identify the true needy.
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