The Consumer Price Index of “food and beverages” stood at 780.2 in the fourth month of the current Iranian year (June 22-July 22) to register a staggering 87% year-on-year rise, the highest among 12 groups of goods and services surveyed by the Statistical Center of Iran.
The group’s annualized and monthly inflation rates reached 55.1% and 5.7% respectively.
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%.
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 with the similar period of last year.
The overall month-on-month and annualized inflation rates stood at 4.6% and 40.5% respectively.
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 the 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 biggest month-on-month price rise for a food item in urban areas was recorded for farmed chicken with 26.1%. The second and third biggest month-on-month price increase during the period under review was registered for mayonnaise with 24.3% and carrot with 21.6%.
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 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.
The Statistical Center of Iran has published the price changes in 53 food products in a new report during the month under review.
The biggest month-on-month price rise for a food item in urban areas was recorded for farmed chicken with 26.1%, which was sold for 575,900 rials ($1.82) per kilogram.
The second and third biggest month-on-month price increase during the period under review was registered for mayonnaise with 24.3% and carrot with 21.6%.
Mayonnaise was sold at 244,033 rials (71 cents) per 300 grams and carrot went for 122,605 rials (39 cents) per kilogram.
Twelve out of 53 food items examined by SCI experienced a price decline in the fourth fiscal month compared with the previous month: Peach with 12.5%, eggplant with 12%, watermelon with 9.2%, tomato with 8.8%, banana with 8.7%, Persian melon with 7%, cucumber with 5.6%, zucchini with 5%, bell pepper with 3.2%, potato with 0.5%, trout with 0.2% and lemon with 0.1% were sold for 343,920 rials ($1.09), 130,649 rials (41 cents), 63,755 rials (20 cents), 130,005 rials (41 cents), 364,823 rials ($1.16), 151,600 rials (48 cents), 131,865 rials (42 cents), 139,754 rials (44 cents), 235,455 rials (75 cents), 168,397 rials (53 cents), 932,819 rials ($2.95) and 354,653 rials ($1.12), respectively.
Compared with the same month of the previous year, the retail prices of vegetable oil increased by 327.5%, registering the highest year-on-year price rise. It was sold at 737,412 rials ($2.34) per 900 grams.
The second and third biggest year-on-year price rise was registered for hydrogenated oil with 285.8% and Grade 1 Iranian rice with 188.4%. A kilogram of hydrogenated oil was sold at 843,744 rials ($2.67) and a kilogram of Grade 1 Iranian rice went for 1.08 million rials ($3.42).
None of the 53 food items registered a year-on-year price deflation in the month under review.
