The Statistical Research and Training Center, affiliated to the Statistical Center of Iran, has forecast the inflation rate for the upcoming months based on trends and patterns of the past years.
The center has come up with three scenarios, each depending on the state of Iran’s economy vis-à-vis sanctions and their possible removal, as Iran and the US are holding indirect talks on a return to compliance with the Joint Comprehensive Plan of Action, the nuclear deal Iran signed with world powers back in 2015.
JCPOA was implemented in 2016, which saw the removal of international sanctions. In exchange, Iran limited the scope of its nuclear program. However, Washington walked out of the deal under the administration of former president, Donald Trump, in May 2018, which unleashed a “maximum pressure” sanctions regime against the Iranian economy.
Both year-on-year and annualized inflations started increasing from the fiscal 2018-19. YOY inflation rate reached 47.5% at the end of the fiscal 2018-19 from 7.1 at the beginning of this year and continued increasing to 52.1% in the second month of the fiscal 2019-20 (April 21-May 21). It then started declining to reach 19.8% in first month of the fiscal 2020-21 (March 20-April 19).
The annualized inflation declined from 42.7% in the month to Sept. 22 of the fiscal 2019-20 to 25.8% in the month to Aug. 21 of the fiscal 2020-21. But it reached 38.9% in the first month of the fiscal 2021-22 (March 21-April 20).
The monthly inflation rate saw a significant increase in the fiscal 2020-21, compared with the previous year. On average, month-on-month inflation stood at 3.4% in the fiscal 2020-21 from 1.7 in the fiscal 2019-20.
Inflation started declining from the first month of the fiscal 2019-20 and reached its lowest level in two years, 19.8%, in the month to April 19 of fiscal 2020-21. The MOM inflation rate started increasing since then and reached 49.5% in the first month of the current fiscal year March 21-April 20.
The annualized inflation started increasing in the first months of the fiscal 2019-20 due to currency fluctuations in the previous year and kept increasing until the month ending Sept. 22 of the same year. It declined until the month to Aug. 22 of the fiscal 2020-21 and reached 25.8%, the lowest point in two years. The inflation rate started increasing since then and reached 38.9% in March 21-April 20 of the fiscal 2021-22.
The Statistical Research and Training Center’s first scenario uses the same pattern as the initial months of the fiscal year 2020-21, and because the inflation rate was very high in that period, this pattern is considered pessimistic. This scenario sees the annualized and YOY inflation rates rise to 47.5% and 48.5% respectively in the sixth month of the current year (Aug. 23-Sept. 22).
In the second scenario, it uses the first months of the fiscal 2016-17 as the base, hypothesizing that the lifting of sanctions during that period will see a significant decrease in inflation rate. This optimistic scenario sees the annualized and YOY inflation rates to reach 42.5% and 29.3% respectively in the sixth month of the current year.
The third scenario, which is actually the average of the two previous scenarios, expects the rates to stand at 45.1% and 39.1% respectively in the sixth month of the current year.
Latest SCI Report
Latest data released by the Statistical Center of Iran show the average goods and services Consumer Price Index in the 12-month period ending April 20, which marks the end of the first Iranian month of fiscal 2021-22, increased by 38.9% compared with the corresponding period of the year before.
SCI had put the average annual inflation rate for the preceding Iranian month, which ended on March 20, at 36.4%.
The consumer inflation for the month under review (March 21-April 20) registered an increase of 49.5% compared with the similar month of the previous Iranian year. The year-on-year inflation of the month ending March 20 was 48.7%.
The overall CPI (using the Iranian year to March 2017 as the base year) stood at 306.1 for the month to April 20, indicating a 2.7% rise compared with the month before. Month-on-month consumer inflation was at 1.8% for the preceding month.
SCI put average annual inflation for urban and rural areas at 38.6% and 40.6% respectively.
CPI registered a year-on-year increase of 48.8% for urban areas and 53% for rural areas in the month ending April 20.
The overall CPI reached 302.7 for urban households and 325.4 for rural households, indicating a month-on-month increase of 2.6% and 3% for urban and rural areas, respectively.
The highest monthly growth in the index among 12 groups of the basket of consumer goods and services purchased by households in the Iranian month ending April 20 was recorded for “miscellaneous items and services” group with 8% while “communications” group posted the lowest inflation of 0.5%.
The highest year-on-year inflation in the month under review was posted for “furniture, home appliances and their maintenance” with 71.3% while the lowest YOY inflation was registered for “communications” group with 19.4%.
The highest and lowest average annual inflation was registered for “transportation” with 65.9% and “communications” with 17.7%.
The growth in overall Consumer Price Index in the first month of the current Iranian year was the highest (4.4%) in Bushehr when compared with the month before.
This comes as, according to SCI data, Chaharmahal-Bakhtiari Province and Tehran posted the lowest month-on-month inflation rate of 1.7%.
Ilam’s goods and services consumer inflation registered a rise of 58.1% during the month ending April 20 compared with the similar month of the year before, the highest among all provinces. The year-on-year CPI growth was the lowest for Qom with 42.8%, compared with that of other Iranian provinces.
Kermanshah saw the highest annual inflation with 42.9% while Qom posted the lowest of 35.8%.
The average goods and services CPI in the 12-month period ending April 20 for Tehran Province, wherein lies the capital city, increased by 38.6% compared with the corresponding period of the last year.
The consumer inflation for the month under review registered an increase of 46% compared with the similar month of the previous Iranian year.
The overall CPI (using the Iranian year to March 2017 as the base year) of Tehran Province stood at 306.4, indicating a 1.7% rise compared with the month before.
