The Central Bank of Iran (CBI) confirmed an earlier report by Iran's Statistical Center that the national economy shrank 5.4 percent in the past Iranian calendar year, which ended on March 20, 2013, Tehran Times daily reported on Wednesday.

Iranian president's deputy for planning Mohammad-Baqer Nobakht said that the high inflation rate in the country is an indication of the recession, according to the report.

The CBI announced earlier in September that the inflation rate for the 12 months period leading to the end of the fifth Iranian month (Aug. 22) reached 39 percent.

Economic observers, however, said that Iran's real inflation rate must be much higher than the official figures.

The CBI Governor Valiollah Seif said special attention must be paid to curbing the runaway inflation, especially the rising price of consumer goods, in order to help reform the national economy.

Also, Iranian Finance and Economic Affairs Minister Ali Tayyebnia was quoted as saying by Tehran Times that low growth rate is currently the main challenge in the national economy.

The ministry will focus on improving the living standards through curbing inflation and promoting businesses, said Tayyebnia who was endorsed as the country's new economy minister in August.

Due to the West's sanctions on Iran's energy sector and financial system for a controversial nuclear program, the Iranian currency depreciated sharply against foreign currencies in the past year.

Global Times