“Communications”, one of 12 groups of goods and services surveyed by the Statistical Center of Iran, registered an annualized inflation of 5.7% in the sixth month of the current Iranian year (Aug. 23-Sept. 22).
It was the lowest average annual inflation among the groups under review.
The group’s month-on-month and year-on-year inflation rates were reported to be 0.8% and 10.4% respectively.
The 12 groups of the basket of consumer goods and services surveyed by e SCI include "food and beveragse" with a coefficient of 26.64%, "tobacco" with 0.59%, "clothing and shoes" with 4.78%, "utilities" 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%.
According to the Statistical Center of Iran, the general annualized inflation in the month to Sept. 22 reached 42.1%.
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%.
Among the 12 groups, the highest and lowest annualized inflation rates were respectively registered for “hotels and restaurants” with 69.8% and “communications” with 5.7%.
The highest and lowest MOM inflation rates were respectively registered for “hotels and restaurants” with 4.9% and “transportation” with 0.2%.
“Hotels and restaurants” with 84.4% and “communications” with 10.4% saw the highest and lowest YOY inflation respectively.
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.
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 its 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.
