“The government failed to control inflation in the last Iranian year,” said economy minister Danesh Jaafari.

Iranian president Mahmoud Ahmadinejad has spent billions of dollars on infrastructure projects and handouts to poor families, which form a key part of his political constituency.

“Despite a central bank report that the government performance in most economic areas has been positive, its plan to decrease inflation has not materialised,” Jaafari said, according to the official IRNA news agency.

Jaafari added that the government’s efforts to promote the private sector, including its privatisation campaign, have been marred by “weak performance”.