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My Profile Top News Reuters top ten news stories delivered to your inbox each day. Subscribe You are here: Home > News > International > Article Home Business & Finance News U.S. Politics International Technology Entertainment Sports Lifestyle Oddly Enough Health Science Special Coverage Video Pictures Your View The Great Debate Blogs Weather Reader Feedback Do More With Reuters RSS Widgets Mobile Podcasts Newsletters Your View Make Reuters My Homepage Partner Services CareerBuilder Affiliate Network Professional Products Support (Customer Zone) Reuters Media Financial Products About Thomson Reuters Economy Ahmadinejad's big election test Mon Jun 1, 2009 8:17pm EDT Email | Print | Share | Reprints | Single Page [-] Text [+] By Fredrik Dahl and Hashem Kalantari TEHRAN (Reuters) - In a way, Iranian restaurateur Mohsen Misaqi notes, President Mahmoud Ahmadinejad has fulfilled the promise to put oil wealth on the table of every family that swept him to power four years ago. "There is more money," said the middle-aged businessman in downtown Tehran. "But with much less buying power. One cannot but feel economic hardship as a result of higher prices for almost everything." A slump in the West checked oil's surge last year, but rising consumer prices -- as well as a lack of jobs -- are still the loudest complaint in Tehran as the Islamic Republic heads to a presidential election where Ahmadinejad faces a challenge from reformers. People like housewife Behjat Soltani agree the economy is Ahmadinejad's weakest point in the run-up to the June 12 poll: "Our family's economic situation has deteriorated considerably compared with four years ago," said the 41-year-old, wearing a black headscarf as she bought food and other groceries in a small Tehran store. But if such bread-and-butter issues work against the incumbent among some in the capital, Ahmadinejad may be stronger electorally in the countryside. The rural poor helped vote him in last time, have benefited from his largesse and like his down-to-earth image. "He still has an enduring popularity, although probably not as high as a few years back, among the urban and rural masses," said Karabekir Akkoyunlu of risk consultancy AKE Ltd in London. When the state coffers were swelled by an unprecedented inflow of petrodollars, Ahmadinejad's government went on a spending spree after his surprise 2005 election victory, lavishing credit and cash during frequent provincial trips to help the needy. During a typical visit to the northwestern province of Qazvin in May, his government announced 160 local development initiatives from roads and water supply to sports facilities. The politicians seeking to deny him a second term accuse him of "charity" economics and of trying to lure voters with handouts, such as much-publicized distribution of "surplus production" potatoes in different locations earlier this year. Former Prime Minister Mirhossein Mousavi, seen as Ahmadinejad's main moderate challenger, says this offends people's dignity without addressing the root causes of poverty. "STILL GROWING" Among voters in the capital, home to more than 15 percent of Iran's rapidly urbanizing population of more than 70 million, economic frustrations tend to overshadow Iran's nuclear dispute with the West, even though the conservative president's rivals say his defiance hurts the economy by isolating the country. Inflation may have come down from last year's 30 percent peak, reaching an annual 18 percent in March, but many Iranians say they still struggle to afford food and other basic items. Government critics also argue that free-spending policies while oil prices were soaring left the world's fifth-largest crude exporter vulnerable to the tumble that started in 2008. Continued... View article on single page Share: Del.icio.us Digg Mixx Yahoo! Facebook LinkedIn Next Article: Netanyahu defies Obama call for settlement freeze Afghanistan and Pakistan Fighting the Taliban A growing insurgency in Afghanistan is also spreading deep into Pakistan, making both countries crucial to U.S. war efforts in the region. Full Coverage More International News Ocean search for Air France jet with 228 aboard continues | Video North Korea's Kim moves to anoint youngest son as heir Pakistani army rescues kidnapped students | Video Netanyahu defies Obama call for settlement freeze Leftist Funes takes over as El Salvador's president More International News... Related News FACTBOX: Economic issues may decide Iran election 01 Jun 2009 Featured Broker sponsored link Editor's Choice Slideshow A selection of our best photos from the past 24 hours. 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