Clothing registered an annualized inflation of 49.1% in the third month of the current fiscal year (May 22-June 21).
With a coefficient of 4.78%, the CPI of “clothing and shoes” stood at 552.5, indicating a 5.6% increase over the earlier month, according to the Statistical Center of Iran.
The index registered a year-on-year increase of 48.7% in the month under review.
The 12 groups of the basket of consumer goods and services purchased by households include "food and beverages" with a coefficient of 26.64%, "tobacco" with 0.59%, "clothing and shoes" with 4.78%, "housing, water, electricity, natural gas and other fuels" with 35.5% (highest), "furniture, home appliances and their maintenance" with 3.93%, "health and treatment" with 7.14%, "transportation" with 9.41%, "communications" with 2.87%, "leisure and culture" with 1.65%, "education" with 1.86%, "hotels and restaurants" with 1.44% and "miscellaneous items and services" with 4.18%.
New SCI data confirm that inflation has reached an unprecedented level.
Food prices increased by a staggering 25.9% in the month to June 21 compared to the previous month.
The record high monthly inflation came after the government decided to overhaul the import subsidy system.
The government move saw the abolition of the controversial practice of allocating cheap dollars at the rate of 42,000 rials per dollar, locally known as Preferential Foreign Currency, for the import of essential goods, including corn, soymeal, unprocessed oil, oilseeds and barley, in addition to wheat, flour and medicine.
Instead, it is depositing cash directly to the account of income deciles 1 to 9.
The current market value of the dollar is above 300,000 rials.
“Until now we have been paying to producers [read importers] but now the subsidies go to consumers. In fact, the Preferential Foreign Currency has not been ceased, rather the allocation method has changed,” President Ebrahim Raisi said in a televised speech on the eve of introducing the move last month.
In his speech, Raisi emphasized that the removal of cheap dollar allocation will not lead to a price rise in wheat, flour and medicine. However, the move has led to a drastic rise in the prices of essential goods.
Also known as necessity or basic goods, essential goods are products consumers will buy, regardless of changes in income levels.
All Commodities Costlier
In fact, the prices of all commodities have risen suddenly in a ripple effect.
The general goods and services Consumer Price Index (using the Iranian year to March 2017 as the base year) stood at 482.1 in the month under review, indicating a 12.2% rise compared to the previous month.
This is the highest monthly price rise on record in SCI’s database (since 2018).
Month-on-month consumer inflation was 3.5% in the preceding month.
The average CPI in the 12 months to June 21 increased by 39.4% compared with the corresponding period of the year before.
SCI had put the average annual inflation rate for the preceding Iranian month (ended May 21) at 38.7%.
Consumer price inflation for the month under review jumped by 52.5% over the same month of the previous fiscal year while year-on-year inflation in the month ending May 21 was 39.3%.
SCI put average inflation for urban and rural areas at 38.9% and 41.8%, respectively.
CPI registered a YOY increase of 51.4% for urban areas and 58.2% for rural areas in the month. The latter reached 473.2 for urban households and 531.9 for rural households, indicating a month-on-month increase of 11.5% and 15.8%, respectively.
The highest and lowest monthly growth in the index among 12 groups of the basket of consumer goods and services purchased by households in the Iranian month ending June 21 was recorded for “food and beverages” with 25.9% and “education” at 1.1% month-on-month.
The highest year-on-year inflation in the month under review was logged by “hotels and restaurants” with 86.4% while the lowest YOY inflation was registered by “communications” with 9.8%.
The highest and lowest annualized inflation rates were registered for “hotels and restaurants” with 63.7% and “communications” with 4.7%.
