The retail prices of potatoes during the month ending June 21 increased nearly fourfold (296.8%) compared with the same period of last year.
A kilogram of potatoes were sold at 66,286 rials (51 cents) to register the highest year-on-year price rise among food items, the Statistical Center of Iran reported.
The second and third biggest year-on-year price rises were registered for tomato paste with 245.6% and onions with 156.4%.
The biggest month-on-month price rise during the period was also recorded for potatoes with 13.2%.
The second and third biggest month-on-month price rises were registered for oranges with 10.3% and Grade A Iranian rice with 10.2%.
A kilogram of tomato paste was sold at 213,17 rials ($1.6), onions 45,086 rials (34 cents), oranges 93,020 rials (72 cents) and Grade A Iranian rice at 227,080 rials ($1.7).
During the third Iranian month (May 22-June 21), prices of onions posted a decrease of 38.9% when compared with the month before, followed by a 19.6% fall in cucumber prices and a 12.6% decline in egg prices MOM.
A kilogram of cucumbers was sold at 44,782 rials (34 cents) and eggs at 78,043 rials (60 cents).
The Consumer Price Index of “Food and Beverages” stood at 216.2 in the month ending June 21, indicating a 0.2% decrease compared with the previous month.
The “Food and Beverages” index registered a year-on-year increase of 74.1% year-on-year.
Prices of onions posted a decrease of 38.9% when compared with the month before, followed by a 19.6% fall in cucumber prices and a 12.6% decline in egg prices month-on-month
The CPI of “Food and Beverages” group in the 12-month period ending June 21 increased by 54.9% compared with last year’s corresponding period, SCI reported.
The overall consumer inflation in Iran registered an increase of 50.4% year-on-year, the Statistical Center of Iran reported.
The overall CPI (using the Iranian year to March 2017 as the base year) stood at 174.9, indicating a 0.8% rise MOM.
The average goods and services Consumer Price Index in the 12-month period ending June 21 increased by 37.6% YOY.
SCI had put the average annual inflation rate for the preceding Iranian month, which ended on May 21 at 34.2%.
Year-on-year and annual consumer price inflation measured for rural areas were higher than those in urban areas. The index registered a YOY increase of 49.3% for urban areas and 56.5% for rural areas compared with the similar month of last year.
The overall CPI reached 173.3 for urban households and 183.3 for rural households, indicating an increase of 0.8% for urban areas and 0.7% for rural areas compared with the previous month.
SCI put urban and rural 12-month inflation for Khordad at 36.9% and 41% respectively.
Risk of 50% Inflation
Consumer prices could average 50% higher in 2019 after the US moved in April to end sanctions waivers granted to a handful of countries buying Iranian oil, says Jihad Azour, the head of the IMF Middle East and Central Asia Department.
Before the announcement, the Washington-based lender had expected inflation to average 37%.
The US decision aims to slash Iranian oil exports to zero and starve the government of essential revenue to compel Tehran to agree to new talks.
Even before the removal of the waivers, the exchange rate had lost two-thirds of its value and “the economy was expected to go into a second year of recession”, Azour said in an interview on Sunday in Dubai, the UAE.
While it’s hard to tell how high prices could surge, “it’s clear that the situation is expected to deteriorate”, he said.
Azour said Iranian authorities should take steps to alleviate the economic pain in the short run, including bringing the official exchange rate in line with market forces and address weaknesses in the financial system by complying with anti-money laundering and terrorism financing laws.
“By aligning the market and official rates, this will help tame and control inflation and will reduce pressure on the exchange rate,” he said.
Authorities also need to “fix or expand their social protection mechanisms to address the additional vulnerabilities” for the poor, he said.
According to the World Bank's latest Global Economic Prospects report published in June, Iran’s inflation (year-on-year) has risen sharply from about 10% in mid-2018 to about 52% in April 2019, contributed by a depreciation of the rial in the parallel market of more than twofold compared to levels prior to the announcement of US sanctions in April 2018.
"Growth in Iran is expected to resume in 2020-21, albeit at weak rates, as the impact of US sanctions tapers and inflation stabilizes," the report reads, noting that further amplification of US-Iran tensions would pose risks for the region’s economies other than Iran.
