The Consumer Price Index of “food and beverages” stood at 790.9 in the fifth month of the current Iranian year (July 23-Aug. 22) to register a staggering 81.2% year-on-year rise, new data released by the Statistical Center of Iran show.
The group’s annualized and monthly inflation rates reached 57.4% and 1.4% 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 514.2 in the month under review to register a 52.2% rise compared with the similar period of last year.
The overall month-on-month and annualized inflation rates stood at 2% and 41.5% respectively.
CPI hit 504.8 for urban households and 567.1 for rural households, indicating a month-on-month increase of 2% and 1.7%, respectively.
SCI put the annualized inflation for urban and rural areas at 40.9% and 44.4%, respectively.
The year-on-year inflation stood at 51.1% for urban areas and 58.4% 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 market value of the dollar is around 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 a 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.
More than 60% of respondents in a recent survey were pessimistic of the recent subsidy reform implemented by the government in principle, mostly because after the execution of the measure, the prices of items other than essential goods also increased.
A pollster affiliated to Majlis Research Center, the research arm of Iranian Parliament, found that over 58% of respondents prefer that the government reduce the prices of essential goods to last year’s level, or supply them via coupon compared to 28% who favored receiving additional direct monthly cash subsidies.
Price Changes of 53 Food Products Reviewed
The Statistical Center of Iran has published the price changes of 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 oranges with 24.2%, which was sold for 275,632 rials (92 cents) per kilogram.
The second and third biggest month-on-month price increase during the period under review was registered for carrot with 21.8% and apple with 13.1%.
Carrot was sold at 149,342 rials (50 cents) per kilogram and apple went for 311,160 rials ($1.04) per kilogram.
Thirteen out of 53 food items examined by SCI experienced a price decline in the fifth fiscal month compared with the previous month: Watermelon with 22.7%, lemon with 20.6%, Persian melon with 17.4%, zucchini with 11.2%, bell pepper with 7.4%, eggplant with 6.1%, peach with 5%, farmed chicken with 4.5%, tomato with 3.9%, cucumber with 3.7%, sugar with 2.7%, hydrogenated oil with 1.7% and vegetable oil with 0.7% were sold for 49,314 rials (17 cents), 281,629 rials (94 cents), 125,190 rials (41 cents), 124,117 rials (42 cents), 218,006 rials (73 cents), 122,725 rials (41 cents), 326,659 rials ($1.09), 549,884 rials ($1.84), 124,957 rials (42 cents), 127,034 rials (43 cents), 264,801 rials (89 cents), 829,667 rials ($2.78) and 731,987 rials ($2.45), respectively.
Compared with the same month of the previous year, the retail prices of vegetable oil increased by 314.6%, registering the highest year-on-year price rise. It was sold at 731,987 rials ($2.45) per 900 grams.
The second and third biggest year-on-year price rise was registered for hydrogenated oil with 288.3% and potato with 193.8%. A kilogram of hydrogenated oil was sold at 829,667 rials ($2.77) and a kilogram of potato went for 172,071 rials (58 cents).
