Iran's Finance Minister, Shamseddin Hosseini, said Tuesday that international sanctions against his country had pushed inflation above 30% and were causing "a lot of trouble", AFP reported.
At the same time he stressed that Iran's nuclear drive would not be halted, the report said.
Lashing out at measures by the United Nations, United States and European Union, Hosseini said the Iranian economy was increasingly gearing up to produce at home the goods that it cannot import.
"We work harder, we work more, we strive much more, we find new ways; we even change trading partners," he told a group of reporters at the Iranian UN mission in New York.
The UN Security Council has ordered four rounds of sanctions to back demands that Iran halt its uranium enrichment. Measures by the United States and EU also target Iran's oil exports and central bank activities.
Western nations say Iran is hiding efforts to make a nuclear bomb. Iran denies the charge, but refuses to disclose key details to the UN atomic watchdog.
"We never have and we never will stop behind the obstacles they create on our path," Hosseini declared, according to AFP.
The minister said the sanctions were "quite vast, all-encompassing and political most of all." They cause "quite a lot of trouble, quite a lot of hard work," he added.
The minister said Iran's inflation rate was now above 30%, up from an official rate of 21% a year ago. Analysts say the figure is much higher. He said unemployment had fallen from 12.3% a year ago to 12.2%.
"The waves of inflation in the last calendar year, we see these being born out of sanctions," Hosseini said.
Sanctions on the oil industry and the central bank had produced a "currency shock" and an "overwhelming" increase in prices of imported goods, he said.
According to the minister, non-oil exports, including mining, agricultural and industrial products, rose by 20% in 2012 and that imports declined by 14%.
"We strive to make up for the decrease in oil exports and trade in general," he said, adding that the government had "no doubt" that the economy had grown in the past year.
He said fewer Iranians were travelling abroad. "There is no reason for us to keep throwing outside of Iranian borders the hard earned petro-dollars."
Hosseini said that the government had given an extra $2.7 billion dollars worth of cash handouts to needy families at the end of 2012 in a bid to overcome hardships caused by sanctions.
Iran’s President Mahmoud Ahmadinejad made a rare acknowledgment several months ago of the economic challenges his country is facing.
“This was a very difficult year for our economy,” Ahmadinejad said, accusing the United States of using its vast economic might to exert unfair pressure on the much smaller Iranian economy.
Ahmadinejad had steadfastly denied that the sanctions are hurting the economy, until Iranian Oil Minister Rostam Qasemi broke ranks and admitted that the sanctions have sliced oil exports by 45 percent.
A recent report to Congress indicated that Western sanctions on Iran have contributed to a drop in the Islamic Republic's access to global sources of capital last year.