The average annual inflation gap measured by the Statistical Center of Iran among income deciles stood at 7.8% in the sixth month of the current Iranian year (Aug. 23-Sept. 22), up 0.8 percentage points compared to the previous month.
The inflation gap in “food, beverages and tobacco” group among income deciles grew by 0.5 percentage points and that of “non-food and services” group declined by 0.1 percentage points compared with the previous month.
The average goods and services Consumer Price Index in the 12-month period ending Sept. 22 increased by 47.6% for the first decile (those with the lowest income) and grew by 39.8% for the 10th decile (those with the highest income).
The annual inflation of “food, beverages and tobacco” stood at 60.7% for the first decile and 58.6% for the 10th decile. “Non-food and services” inflation was reported at 32.4% for the first decile and 35% for the 10th decile.
Average annual inflation rates stood at 46.3% for the second decile compared with last year’s corresponding period; 44.8% for the third decile; 44.1% for the fourth; 43.3% for the fifth; 42.7% for the sixth; 42% for the seventh; 41.1% for the eighth and 40.6% for the ninth decile.
The highest overall CPI (using the Iranian year to March 2017 as the base year) stood at 560.6 for the second decile and the lowest was 526.4 for the eighth decile.
The first decile saw a month-on-month inflation of 2.1%, the second, third, fourth, fifth and sixth deciles each registered 2.2%, the seventh and eighth deciles each registered 2.1%, the ninth 1.9% and the 10th deciles 1.8%.
The year-on-year inflation rates stood at 60.1% for the first decile, 57.6% for the second, 55.3% for the third, 54% for the fourth, 52.5% for the fifth, 51.5% for the sixth, 50% for the seventh, 48.3% for the eighth and 46.8% for the ninth and 43.8% for the 10th decile.
Income deciles are groupings that result from ranking either all households or all persons in the population in the ascending order according to income and then dividing the population into 10 groups, each comprising approximately 10% of the estimated population.
General Annualized Inflation at 42.1%
Irrespective of income deciles, the general goods and services Consumer Price Index (using the Iranian year to March 2017 as the base year) stood at 525.4 in the month under review, indicating a month-on-month rise of 2.2% and a year-on-year rise of 49.7%.
The annualized inflation stood at 42.1% in the sixth fiscal month.
CPI hit 515.7 for urban households and 579.8 for rural households, each indicating a month-on-month increase of 2.2%.
SCI put the annualized inflation for urban and rural areas at 41.5% and 45.3%, respectively. The year-on-year inflation stood at 48.4% for urban areas and 56.3% for rural areas in the month.
Among 12 groups of goods and services reviewed by SCI, the highest and lowest annualized inflation rates were registered respectively for “hotels and restaurants” with 69.8% and “communications” with 5.7%.
The highest MOM inflation rates were respectively registered for “hotels and restaurants” with 4.9% and “transportation” at 0.2% month-on-month.
“Hotels and restaurants” with 84.4% and “communications” with 10.4% saw the highest and lowest YOY inflation respectively.
With a coefficient of 26.64%, the CPI of “food and beverages” stood at 807.9 in the month ending Sept. 22, indicating a 2.2% increase from the previous month. The index registered a YOY increase of 76.1% and the CPI of the group increased by 59% in the 12-month period to Sept. 22 compared with the corresponding period of last year.
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 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 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.
