The general goods and services Consumer Price Index (using the Iranian year to March 2017 as the base year) stood at 504.3 in the fourth month of the current Iranian year (June 22-July 22) to register a record high of 54% compared to the similar period of last year, new data released by the Statistical Center of Iran show.
The highest year-on-year inflation was registered for the “food and beverage” group with 87% while “communications” saw the lowest YOY rate of 10.8%.
The month-on-month and annualized inflation stood at 4.6% and 40.5% 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 July 22 was recorded for “home appliances, furniture and maintenance” with 6.1% and “communications” at 1% month-on-month.
The highest and lowest annualized inflation rates were registered for “hotels and restaurants” with 65.9% and “communications” with 5%.
The CPI hit 494.7 for urban households and 557.6 for rural households, indicating a month-on-month increase of 4.8% and 4.6%, respectively.
SCI put the annualized inflation for urban and rural areas at 40% and 43.2%, respectively.
The year-on-year inflation stood at 52.8% for urban areas and 60.7% for rural areas in the month.
The rise in prices of goods and services accelerated at an unprecedented pace 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 the Preferential Foreign Currency, to import essential goods, including corn, soymeal, unprocessed oil, oilseeds and barley, in addition to wheat, flour and medicine.
The market value of the dollar is above 300,000 rials now.
“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 the introduction of the move in May.
In his speech, Raisi emphasized that the removal of cheap dollar allocation will not lead to a price rise in wheat, flour, medicine. However, the move has led to dramatic 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.
In fact, the prices of all commodities and services have also risen suddenly in a ripple effect.
Below are the details of price changes as experienced by the 12 groups of consumer goods and services as reported by SCI.
Food and Beverages
With a coefficient of 26.64%, CPI for food and beverages stood at 780.2 in the month to July 22, indicating a 5.7% increase from the previous month. The index registered a YOY increase of 87% and the CPI of the group increased by 55.1% in the 12-month period to July 22 YOY.
Tobacco
The CPI for tobacco was 702.1, indicating a 3.4% rise from the previous month. The tobacco index, which has the least impact on the total inflation rate with a coefficient of 0.59%, registered a YOY increase of 46.7%. The annualized CPI of the group grew by 36.3% compared with the corresponding period of the year before.
Clothing and Shoes
With a coefficient of 4.78%, the CPI for clothing and shoes reached 572.3, indicating a 5.6% increase over the previous month. This index registered a YOY increase of 49% in the month under review. The average annual CPI of the group jumped by 48.7% from last year.
Housing and Utilities
The CPI of housing and utilities (water, electricity, natural gas and other fuels) stood at 303.1, indicating a 3.9% rise compared with the previous month. The group’s CPI index, which has the biggest impact on the total inflation rate with a coefficient of 35.5%, registered a YOY increase of 31.4%. Annualized CPI of the group was at 27.7%.
Home Appliances, Furniture and Maintenance
With a coefficient of 3.93%, CPI for furniture, home appliances and their maintenance was 624 – up 4.1% on the previous month. The group’s CPI registered a YOY increase of 37% while the average annual CPI of the group increased by 36.9% over last year.
Health and Medical Treatment
The CPI of health and medical treatment was 376, indicating a 6.1% increase from the month before. This index, with a coefficient of 7.14%, registered an increase of 36.6% compared with the similar month of last year. The group’s annual inflation during the month was 35.7%.
Transportation
With a coefficient of 9.41%, the transportation CPI was 588.2, up 3.1% on the month before. This index registered a YOY increase of 41.7% and its annualized CPI increased by 35.7%.
Communications
The CPI of communications stood at 195.5, up 1% compared with the month before. With a coefficient of 2.87%, it showed a YOY increase of 10.8% while the annualized inflation reached 5%.
Leisure and Culture
The leisure and culture CPI stood at 558.6, indicating a 2.9% rise compared with that of the previous month. With a coefficient of 1.65%, it saw a YOY increase of 31.9%, as its annualized inflation hit 32.5%.
Education
With a coefficient of 1.86%, the CPI for education was 286.4, indicating a 3.9% rise from the month before. The group’s CPI index registered a YOY increase of 30.9% while the annualized CPI of the group surged to 26.7%.
Hotels and Restaurants
The hotels and restaurants CPI came in at 641.7, up 5.8% over the previous month. With a coefficient of 1.44%, the YOY increase was 84.7% and annualized inflation was at 65.9%.
Miscellaneous Goods and Services
The CPI of goods and services in the miscellaneous group was 505, indicating a 3% growth compared to the month before. With a coefficient of 4.18%, this index was up 37.6% and its average annual inflation hovered near 36.1%.
