The average annual inflation gap measured by the Statistical Center of Iran among income deciles stood at 2.2% in the seventh Iranian month (Sept. 23-Oct. 22), indicating a 0.1 percentage point decline compared with the previous month’s 2.3%.
The inflation gap of “food, beverages and tobacco” group among income deciles increased by 0.8 percentage point whereas that of “non-food and services” decreased by 1.1 percentage point month-on-month.
The average goods and services Consumer Price Index in the 12-month period ending Oct. 22 increased by 41.7% for the first decile (those with the lowest income) while it grew by 43.9% for the 10th decile (those with the highest income).
Average inflation rates grew by 42.8% for the second, third, seventh and eighth deciles compared with last year’s corresponding period. The annual inflation rate for the fourth decile increased by 42.7% in the same month, the fifth decile 42.6%, the sixth decile 42.3% and the ninth decile 43.1%.
The highest overall CPI (using the Iranian year to March 2017 as the base year) stood at 188.2 for the 10th decile, and the lowest was 182 calculated for the first decile.
The year-on-year inflation rates increased by 26.5% for the first decile during the month under review, 27.5% for second, 27.7% for third, 27.9% for fourth decile, 28.2% for fifth, sixth and seventh, 28.3% for eighth, 28.4% for ninth and 28.5% for the 10th decile
Income deciles are groupings that result from ranking either all households or all persons in the population in the ascending order according to income, and then dividing the population into 10 groups, each comprising approximately 10% of the estimated population.
The government recently discontinued monthly payments of cash subsidies to a further 400,000 individuals who were found to be economically advantaged. In doing so, the number of those removed from the list of cash subsidy recipients over the past two months hit 1.1 million.
All those who will no longer receive such payments fall within the top three high-income deciles. Plans are to narrow down the list by 24 million by the end of the year (March 19, 2020.)
The Iranian Cabinet ratified on July 7 the implementation of Clause 14 of the Budget Law, which pertains to Targeted Subsidies Law. As per the directive signed by First Vice President Es’haq Jahangiri, related governmental bodies were tasked with identifying and removing households from the top three high-income deciles within a month of the notification.
The Targeted Subsidies Law of 2010 authorized the reduction of food and energy subsidies, and instead allowed the payment of 455,000 rials ($4) to each and every Iranian on a monthly basis. The plan has been retained and more than 90% of Iranians currently receive the monthly grant of cash subsidies.
"Given the economic pressures faced by low- and middle-income families, the measure [to remove cash subsidy receivers] will be carried out cautiously to reduce the margin of error in identifying households who don’t need the government’s cash subsidies," Minister of Cooperatives, Labor and Social Welfare Mohammad Shariatmadari has been quoted as saying.
