The Statistical Center of Iran’s latest survey of the country’s 31 provinces shows Kohgilouyeh-Boyerahmad registered the highest average annual inflation with 47.6% while Sistan-Baluchestan posted the lowest at 35.4% in the current Iranian year’s fourth month (June 22-July 22).
At the country level, the average goods and services CPI in Iran for the 12-month period ending July 22 increased by 40.5% compared with the preceding year’s corresponding period.
On a month-on-month basis, the growth in Consumer Price Index in the month under review was the highest (7.1%) in Hamedan, while Gilan posted the lowest (3.3%) compared with the previous month.
The overall CPI, using the Iranian year to March 2017 as the base year, stood at 504.3 in the month to July 22, indicating a 4.6% rise compared with the previous month.
West Azarbaijan Province’s goods and services consumer inflation registered a rise of 63.9% during the month ending July 22 compared with the similar month of the year before, the highest among all provinces. The year-on-year CPI growth was the lowest for Khuzestan Province with 47.3%, compared with that of other Iranian provinces.
The overall goods and services CPI in Iran registered a year-on-year increase of 54% in the same month.
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 “health and medical treatment” 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%.
Urban Households
The overall CPI calculated for urban areas stood at 494.7 during the fourth month of the current Iranian year, indicating a 4.5% rise compared with the previous month.
The growth in CPI measured for provincial urban households compared with the previous month was the highest (7.1%) for Hamedan while Gilan recorded the lowest monthly inflation rate with an increase of 3.3% compared with other provinces.
The index registered a year-on-year increase of 52.8% for urban areas. Goods and services CPI of West Azarbaijan’s urban areas registered a year-on-year rise of 61.1% during the month under review, the highest among all provinces. The CPI increase in urban areas was the lowest for Khuzestan with 46.6% YOY.
The average CPI in urban areas for the month under review increased by 40% compared with the same period of last year. Households living in the urban areas of Kohgilouyeh-Boyerahmad experienced the highest annual inflation (with 46%) while those of Sistan-Baluchestan witnessed the lowest annual inflation (34.7%) among all Iranian provinces.
Rural Households
The overall CPI calculated for rural areas stood at 557.6 in the month under review, which indicate a 4.8% increase compared with the previous month.
The growth in CPI of rural households compared with the previous month was highest for Bushehr with 7.4%. This is while rural households living in Yazd saw a 2.8% decline in the prices of goods and services compared with the month before, the lowest rate compared with other provinces.
The index registered an average year-on-year increase of 60.7% for rural areas in the same month. CPI of Qazvin Province’s rural areas registered a YOY increase of 71.2% during the fourth month of the Iranian year, the highest among all provinces, whereas the year-on-year CPI increase was the lowest for Khuzestan with 51.1%, compared with other provincial rural areas.
The average goods and services CPI of rural areas in the month under review increased by 43.2% year-on-year.
Kohgilouyeh-Boyerahmad registered the highest annual inflation in rural areas (50.8%) while Hamedan posted the lowest annual inflation rate (34.9%).
Tehran Province
The average goods and services CPI in the 12-month period ending July 22 for Tehran Province, wherein lies the capital city, increased by 38.6% compared with the corresponding period of last year.
SCI had put Tehran’s average annual inflation rate for the preceding Iranian month, which ended on June 21, at 37.5%.
The consumer inflation for the month under review registered an increase of 49.8% year-on-year while it was 49.3% in the preceding month.
The CPI (using the Iranian year to March 2017 as the base year) of Tehran Province stood at 492.1 in the month to July 22, indicating a 4.4% rise compared with the month before. Month-on-month consumer inflation was 4.6% for the preceding month.
SCI put Tehran Province’s urban and rural 12-month inflation rates for the month under review at 38.6% and 40.2%, respectively.
CPI registered a year-on-year increase of 49.7% for urban areas and 54.1% for rural areas in the month under review.
The overall CPI reached 491.4 for urban households and 519.1 for rural households, indicating a month-on-month increase of 4.4% for urban areas and 4.7% for rural areas.
Impact of Import Subsidy Abolition
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 currently 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 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 and medicine.
However, the move has led to dramatic rise in the prices of essential goods. In fact, the prices of all commodities and services have also risen suddenly in a ripple effect.
Also known as necessity or basic goods, essential goods are products consumers will buy, regardless of changes in income levels.
